ABC Company experienced a decline in the value of its inventory in 2020 which resulted in a write-down from a cost of P2.400,000 to net realizable value of P1,650,000. The entity's practice is to use the allowance method in recording necessary adjustments. In 2021, market conditions have improved and on December 31, 2021, the inventory had a cost of P4,200,000 and net realizable value of 3,750.000. Compute for the amount of gain on reversal of inventory write-down on December 31,2021.

ABC Company experienced a decline in the value of its inventory in 2020 which resulted in a write-down from a cost of P2.400,000 to net realizable value of P1,650,000. The entity's practice is to use the allowance method in recording necessary adjustments. In 2021, market conditions have improved and on December 31, 2021, the inventory had a cost of P4,200,000 and net realizable value of 3,750.000. Compute for the amount of gain on reversal of inventory write-down on December 31,2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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