Question

As a result of its annual inventory count, Bridgeport Corp. determined its ending inventory at cost and at lower of cost and net realizable value at December 31, 2019, and December 31, 2020. December 31, 2019, was Bridgeport’s first year end. This information is as follows:

		Cost			Lower of Cost and NRV
Dec. 31, 2019		$	321,800		$283,450
Dec. 31, 2020			385,600		352,150

Prepare the journal entries required at December 31, 2019 and 2020, assuming that the inventory is recorded at cost and an allowance account is adjusted at each year end under a periodic system. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 12/31/19 enter an account title to record ending inventory at cost on December 31, 2019 enter a debit amount enter a credit amount enter an account title to record ending inventory at cost on December 31, 2019 enter a debit amount enter a credit amount (To record ending inventory at cost) 12/31/19 enter an account title to write-down inventory to lower NRV on December 31, 2019 enter a debit amount enter a credit amount enter an account title to write-down inventory to lower NRV on December 31, 2019 enter a debit amount enter a credit amount (To write-down inventory to lower NRV) 12/31/20 enter an account title to transfer out beginning inventory balance on December 31, 2020 enter a debit amount enter a credit amount enter an account title to transfer out beginning inventory balance on December 31, 2020 enter a debit amount enter a credit amount (To transfer out beginning inventory balance) 12/31/20 enter an account title to record ending inventory at cost on December 31, 2020 enter a debit amount enter a credit amount enter an account title to record ending inventory at cost on December 31, 2020 enter a debit amount enter a credit amount (To record ending inventory at cost) 12/31/20 enter an account title to record recovery of write down of inventory to lower NRV on December 31, 2020 enter a debit amount enter a credit amount enter an account title to record recovery of write down of inventory to lower NRV on December 31, 2020 enter a debit amount enter a credit amount (To record recovery of write down of inventory to lower NRV) SHOW LIST OF ACCOUNTS Accounts Payable Accounts Receivable Allowance to Reduce Inventory to NRV Biological Assets Buildings Cash Cost of Goods Sold Equipment Interest Expense Interest Income Interest Payable Interest Receivable Inventory Inventory Over and Short Land Liability for Onerous Contracts Loss on Inventory Due to Decline in NRV Loss on Purchase Contracts No Entry Purchase Discounts Purchase Discounts Lost Purchase Returns and Allowances Purchases Raw Materials Realized Gain or Loss Rebate Receivable Recovery of Loss on Inventory Due to Decline in NRV Refund Liability Retained Earnings Sales Returns and Allowances Sales Revenue Supplies Expense Unrealized Gain or Loss

Answer 1

Date	Account Titles and explanation	Debit	Credit
Dec 31,2019	Inventory	3,21,800
	Cost of goods sold		3,21,800
Dec 31,2019	Loss on NRV due to decline in NRV(321800-283450)	38,350
	Allowance to reduce to NRV		38,350
Dec 31,2020	Cost of goods sold	3,21,800
	Inventory		3,21,800
Dec 31,2020	Inventory	3,85,600
	Cost of goods sold		3,85,600
Dec 31,2020	Loss on NRV due to decline in NRV(385600-352150)	33,450
	Allowance to reduce to NRV		33,450