Question

Presented below is information related to Windsor Enterprises.

		Jan. 31		Feb. 28		Mar. 31		Apr. 30
Inventory at cost		$16,800		$16,912		$19,040		$15,680
Inventory at LCNRV		16,240		14,112		17,472		14,896
Purchases for the month				19,040		26,880		29,680
Sales for the month				32,480		39,200		44,800

Prepare the journal entry required to establish the valuation account at January 31 and entries to adjust it monthly thereafter. (Credit account titles are automatically indented when 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
Jan. 31Feb. 28Mar. 31Apr. 30
Jan. 31Feb. 28Mar. 31Apr. 30
Jan. 31Feb. 28Mar. 31Apr. 30
Jan. 31Feb. 28Mar. 31Apr. 30

Answer 1

		Jan. 31	Feb. 28	Mar. 31	Apr. 30
Inventory at cost	A	$         16,800	$     16,912	$     19,040	$     15,680
Inventory at LCNRV	B	$         16,240	$     14,112	$     17,472	$     14,896
Allowance amount needed to reduce inventory to NRV	A-B	$              560	$      2,800	$      1,568	$         784
Gain (loss) due to market fluctuations of inventory			$     (2,240)	$      1,232	$         784
			(500-2800)

Date	Account Titles and Explanation	Debit	Credit
Jan. 31	Loss Due to Decline of Inventory to NRV	$        560
	Allowance to Reduce Inventory to NRV		$          560
Feb. 28	Loss Due to Decline of Inventory to NRV	$     2,240
	Allowance to Reduce Inventory to NRV		$       2,240
Mar. 31	Allowance to Reduce Inventory to NRV	$     1,232
	Recovery of Inventory Loss		$       1,232
Apr. 30	Allowance to Reduce Inventory to NRV	$        784
	Recovery of Inventory Loss		$          784