____ 3. When applying the indirect method [allowance method] of accounting for Lower of Cost or...
____ 3. When applying the indirect method [allowance method] of accounting for Lower of Cost or Market inventory values which of the following accounts should be debited when the initial adjusting entry is made and market is lower than cost?
A. Loss Due to Market Decline in Inventory Value.
B. Cost of Goods Sold.
C. Inventory
D. Allowance to Reduce Inventory to Market
E. Allowance for loss of inventory
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____ 3. When applying the indirect method [allowance method] of
accounting for Lower of Cost or...
When net realizable value is lower than cost, and the loss method applying the lower-of-cost-and-net-realizable approach...
When net realizable value is lower than cost, and the loss method applying the lower-of-cost-and-net-realizable approach of recording the write-down is used, what account is credited? A. Allowance to Reduce Inventory to NRV. B. Inventory. C. Cost of Goods Sold. D. A loss account.
Novak Company began operations in 2019 and determined its ending inventory at cost and at lower-of-LIFO...
Novak Company began operations in 2019 and determined its ending inventory at cost and at lower-of-LIFO cost-or-market at December 31, 2019, and December 31, 2020. This information is presented below: Lower-of-Cost-or- Market $357,400 371,940 Cost $375,880 386,720 12/31/19 12/31/20 (a) Prepare the journal entries required at December 31, 2019, and December 31, 2020, assuming that the inventory is recorded at market, and a perpetual inventory system (cost-of-goods-sold method) is used. (Credit account titles are automatically indented when amount is entered....
Recording a Loss in Applying Lower-of-Cost-or-Net Realizable Value On December 31, 2020, Vale Inc. estimated the...
Recording a Loss in Applying Lower-of-Cost-or-Net Realizable Value On December 31, 2020, Vale Inc. estimated the cost of inventory under the average cost method to be $88,000 and the net realizable value of inventory to be $85,000. The company has not previously recorded a holding loss on inventory. a. Prepare the journal entry to record the holding loss on inventory using an allowance account to reduce inventory and cost of goods sold to adjust expense. b. Prepare the journal entry...
Headland Company determined its ending inventory at cost and at LCNRV at December 31, 2020, December...
Headland Company determined its ending inventory at cost and at LCNRV at December 31, 2020, December 31, 2021, and December 31, 2022, as shown below. Cost NRV 12/31/20 $650,200 $650,200 12/31/21 778,000 705,000 12/31/22 958,800 878,200 Your answer is correct. Prepare the journal entries required at December 31, 2021, and at December 31, 2022, assuming that a perpetual inventory system and the cost-of- goods-sold method of adjusting to LCNRV is used. (Credit account titles are automatically indented when amount is...
Bluebell Enterprises Ltd.'s records reported an inventory cost of $55,600 and a net realizable value of...
Bluebell Enterprises Ltd.'s records reported an inventory cost of $55,600 and a net realizable value of $54,000 at December 31, 2015. At December 31, 2016, the records indicated a cost of $68,700 and a net realizable value of $61,625. All opening inventory had been sold during the year. *(a) Your answer is correct. Assuming that Bluebell Enterprises uses a perpetual inventory system, prepare the necessary December 31, 2016 entry under the direct method and the indirect method. (Credit account titles...
Brief Exercise 8-16 Bramble Enterprises Ltd's records reported an inventory cost of $55,800 and a net...
Brief Exercise 8-16 Bramble Enterprises Ltd's records reported an inventory cost of $55,800 and a net realizable value of $52,200 at December 31, 2015. At December 31, 2016, the records indicated a cost of $71,500 and a net realizable value of $61,400. All opening inventory had been sold during the year. Assuming that Bramble Enterprises uses a perpetual inventory system, prepare the necessary December 31, 2016 entry under the direct method and the indirect method. (Credit account titles are automatically...
Learning Objectives 1,4 P6-30A Accounting principles for inventory and applying the lower-of-cost- or-market rule Some of...
Learning Objectives 1,4 P6-30A Accounting principles for inventory and applying the lower-of-cost- or-market rule Some of Mand C Electronics's merchandise is gathering dust. It is now December 31, 2018, and the current replacement cost of the ending merchandise inventory is $24,000 below the business's cost of the goods, which was $97,000. Before any adjust- ments at the end of the period, the company's Cost of Goods Sold account has a bal- ance of $380,000 Requirements 1. Journalize any required entries....
-4 P6-30A Accounting principles for inventory and applying the lower-of-cost- or-market rule Some of Mand C...
-4 P6-30A Accounting principles for inventory and applying the lower-of-cost- or-market rule Some of Mand C Electronics's merchandise is gathering dust. It is now December 31, 2018, and the current replacement cost of the ending merchandise inventory is $24,000 below the business's cost of the goods, which was $97,000. Before any adjust- ments at the end of the period, the company's Cost of Goods Sold account has a bal- ance of $380,000. Requirements 1. Journalize any required entries. 2. At...
Brief Exercise 6-37 (Algorithmic) Lower of Cost or Market Garcia Company uses FIFO, and its inventory...
Brief Exercise 6-37 (Algorithmic) Lower of Cost or Market Garcia Company uses FIFO, and its inventory at the end of the year was recorded in its accounting records at $19,300. Due to technological changes in the market, Garcia would be able to replace its inventory for $15,440. Required: 1. Using the lower of cost or market method, what amount should Garcia report for inventory on its balance sheet at the end of the year? 2. Prepare the journal entry required...
17. When the allowance method is used to account for uncollectible accounts, Bad Debt Expense is...
17. When the allowance method is used to account for uncollectible accounts, Bad Debt Expense is debited when a. a customer's account becomes past-due. b. a sale is made. an account becomes bad and is written off. d. management estimates the amount of uncollectibles. C. 18. Under the allowance method, when an account becomes uncollectible and must be written off a. Bad Debt Expense should be debited b. Accounts Receivable should debited c. Allowance for Doubtful Account should be debited...
Novak Company began operations in 2019 and determined its ending inventory at cost and at lower-of-LIFO cost-or-market at December 31, 2019, and December 31, 2020. This information is presented below: Lower-of-Cost-or- Market $357,400 371,940 Cost $375,880 386,720 12/31/19 12/31/20 (a) Prepare the journal entries required at December 31, 2019, and December 31, 2020, assuming that the inventory is recorded at market, and a perpetual inventory system (cost-of-goods-sold method) is used. (Credit account titles are automatically indented when amount is entered....
Recording a Loss in Applying Lower-of-Cost-or-Net Realizable Value On December 31, 2020, Vale Inc. estimated the cost of inventory under the average cost method to be $88,000 and the net realizable value of inventory to be $85,000. The company has not previously recorded a holding loss on inventory. a. Prepare the journal entry to record the holding loss on inventory using an allowance account to reduce inventory and cost of goods sold to adjust expense. b. Prepare the journal entry...
Headland Company determined its ending inventory at cost and at LCNRV at December 31, 2020, December 31, 2021, and December 31, 2022, as shown below. Cost NRV 12/31/20 $650,200 $650,200 12/31/21 778,000 705,000 12/31/22 958,800 878,200 Your answer is correct. Prepare the journal entries required at December 31, 2021, and at December 31, 2022, assuming that a perpetual inventory system and the cost-of- goods-sold method of adjusting to LCNRV is used. (Credit account titles are automatically indented when amount is...
Bluebell Enterprises Ltd.'s records reported an inventory cost of $55,600 and a net realizable value of $54,000 at December 31, 2015. At December 31, 2016, the records indicated a cost of $68,700 and a net realizable value of $61,625. All opening inventory had been sold during the year. *(a) Your answer is correct. Assuming that Bluebell Enterprises uses a perpetual inventory system, prepare the necessary December 31, 2016 entry under the direct method and the indirect method. (Credit account titles...
Brief Exercise 8-16 Bramble Enterprises Ltd's records reported an inventory cost of $55,800 and a net realizable value of $52,200 at December 31, 2015. At December 31, 2016, the records indicated a cost of $71,500 and a net realizable value of $61,400. All opening inventory had been sold during the year. Assuming that Bramble Enterprises uses a perpetual inventory system, prepare the necessary December 31, 2016 entry under the direct method and the indirect method. (Credit account titles are automatically...
Learning Objectives 1,4 P6-30A Accounting principles for inventory and applying the lower-of-cost- or-market rule Some of Mand C Electronics's merchandise is gathering dust. It is now December 31, 2018, and the current replacement cost of the ending merchandise inventory is $24,000 below the business's cost of the goods, which was $97,000. Before any adjust- ments at the end of the period, the company's Cost of Goods Sold account has a bal- ance of $380,000 Requirements 1. Journalize any required entries....
-4 P6-30A Accounting principles for inventory and applying the lower-of-cost- or-market rule Some of Mand C Electronics's merchandise is gathering dust. It is now December 31, 2018, and the current replacement cost of the ending merchandise inventory is $24,000 below the business's cost of the goods, which was $97,000. Before any adjust- ments at the end of the period, the company's Cost of Goods Sold account has a bal- ance of $380,000. Requirements 1. Journalize any required entries. 2. At...
Brief Exercise 6-37 (Algorithmic) Lower of Cost or Market Garcia Company uses FIFO, and its inventory at the end of the year was recorded in its accounting records at $19,300. Due to technological changes in the market, Garcia would be able to replace its inventory for $15,440. Required: 1. Using the lower of cost or market method, what amount should Garcia report for inventory on its balance sheet at the end of the year? 2. Prepare the journal entry required...
17. When the allowance method is used to account for uncollectible accounts, Bad Debt Expense is debited when a. a customer's account becomes past-due. b. a sale is made. an account becomes bad and is written off. d. management estimates the amount of uncollectibles. C. 18. Under the allowance method, when an account becomes uncollectible and must be written off a. Bad Debt Expense should be debited b. Accounts Receivable should debited c. Allowance for Doubtful Account should be debited...
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