Question

--/1 Question 1 View Policies Current Attempt in Progress Splish Company began operations in 2017 and determined its ending inventory at cost and at LCNRV at December 31, 2017, and December 31, 2018. This information is presented below. Net Realizable Value Cost 12/31/17 $341,860 $318,330 12/31/18 376,520 357,230 (a) Prepare the journal entries required at December 31, 2017, and December 31, 2018, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods-sold method. (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 for the amounts.) Date Account Titles and Explanation Debit Credit 12/31/17 12/31/18

Answer 1

Answer
Journal entries
date	Particulars			Debit	credit
31-12-2017	cost of goods sold (341860-318330)			$     23,530
	allowance to reduce inventory to NRV				$     23,530
31-12-2018	allowance to reduce inventory to NRV			$       4,240
	cost of goods sold (23530-19290)***				$       4,240
(B)
Date	particulars			debit	credit
31-12-2017	loss due to decline of inventory to NRV			$     23,530
	Allowance to reduce inventory to NRV				$     23,530
31-12-2018	Allowance to reduce inventory to NRV			$       4,240
	loss due to decline of inventory to NRV				$       4,240
*** Reduce inventory to NRV= 376520-357230 =19290 & we have 23530
since we req (23530-19290) =4240
C) Both method : Both methods provide the same net income.
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