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 directly at the lower of cost and net realizable value and a periodic inventory system is used. (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 LC and NRV on December 31, 2019 enter a debit amount enter a credit amount enter an account title to record ending inventory at LC and NRV on December 31, 2019 enter a debit amount enter a credit amount (To record ending inventory at LC and 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 LC and NRV on December 31, 2020 enter a debit amount enter a credit amount enter an account title to record ending inventory at LC and NRV on December 31, 2020 enter a debit amount enter a credit amount (To record ending inventory at LC and NRV) 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) Which of the two methods above provides the higher net income in each year? select a method: Both methods have the same effect on net income. The method in which inventory is recorded at cost and an allowance account is adjusted at each year end is higher. The method in which inventory is recorded directly at the lower of cost and net realizable value is higher

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 directly at the lower of cost and net realizable value and a periodic inventory system is used. (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 LC and NRV on December 31, 2019 enter a debit amount enter a credit amount enter an account title to record ending inventory at LC and NRV on December 31, 2019 enter a debit amount enter a credit amount (To record ending inventory at LC and 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 LC and NRV on December 31, 2020 enter a debit amount enter a credit amount enter an account title to record ending inventory at LC and NRV on December 31, 2020 enter a debit amount enter a credit amount (To record ending inventory at LC and NRV) 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) Which of the two methods above provides the higher net income in each year? select a method: Both methods have the same effect on net income. The method in which inventory is recorded at cost and an allowance account is adjusted at each year end is higher. The method in which inventory is recorded directly at the lower of cost and net realizable value is higher

Name: As a result of its annual inventory count, Bridgeport Corp. determined
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Description: 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 in

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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	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 directly at the lower of cost and net realizable value and a periodic inventory system is used. (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 LC and NRV on December 31, 2019	enter a debit amount	enter a credit amount
	enter an account title to record ending inventory at LC and NRV on December 31, 2019	enter a debit amount	enter a credit amount
	(To record ending inventory at LC and 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 LC and NRV on December 31, 2020	enter a debit amount	enter a credit amount
	enter an account title to record ending inventory at LC and NRV on December 31, 2020	enter a debit amount	enter a credit amount
	(To record ending inventory at LC and NRV)

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)

Which of the two methods above provides the higher net income in each year?

select a method:

Both methods have the same effect on net income.
The method in which inventory is recorded at cost and an allowance account is adjusted at each year end is higher.
The method in which inventory is recorded directly at the lower of cost and net realizable value is higher.

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