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At 12/31/21, the end of Bell Company's first year of business, inventory was $158,800 and $157,900 at cost and at net realizable value, respectively. Bell uses FIFO for valuing inventories, and they apply the lower of cost or net realizable value on an individual item basis to compute the inventory valuation on 12/31/21. Bell uses the allowance method to reduce inventories, as needed. The following table displays information for Bell's inventory at 12/31/22. Product A-1 A-2 B-1 B-2 B-3 C-1 Cost 12.00 13.50 38.40 42.50 44.20 68.00 Replacment Cost 11.00 13.00 36.00 42.00 45.00 68.00 What journal entry is required at 12/31/22? Selling Price 15.00 18.00 48.00 50.00 52.00 80.00 Costs to complete 4.00 3.00 8.00 8.00 8.00 9.00 Normal Profit on Sales 20% 25% 20% 15% 15% 15% Quantity 1,200 1,000 900 800 750 500

At 12/31/21, the end of Bell Company's first year of business, inventory was $158,800 and $157,900 at cost and at net realizable value, respectively. Bell uses FIFO for valuing inventories, and they apply the lower of cost or net realizable value on an individual item basis to compute the inventory valuation on 12/31/21. Bell uses the allowance method to reduce inventories, as needed. The following table displays information for Bell's inventory at 12/31/22. Product A-1 A-2 B-1 B-2 B-3 C-1 Cost 12.00 13.50 38.40 42.50 44.20 68.00 Replacment Cost 11.00 13.00 36.00 42.00 45.00 68.00 What journal entry is required at 12/31/22? Selling Price 15.00 18.00 48.00 50.00 52.00 80.00 Costs to complete 4.00 3.00 8.00 8.00 8.00 9.00 Normal Profit on Sales 20% 25% 20% 15% 15% 15% Quantity 1,200 1,000 900 800 750 500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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At 12/31/21, the end of Bell Company's first year of business, inventory was $158,800 and $157,900 at cost and at net realizable value, respectively. Bell uses FIFO for valuing inventories, and they apply the lower of cost or net realizable value on an individual item basis to compute the inventory valuation on 12/31/21. Bell uses the allowance method to reduce inventories, as needed. The following table displays information for Bell's inventory at 12/31/22. Product A-1 A-2 B-1 B-2 B-3 C-1 Cost 12.00 13.50 38.40 42.50 44.20 68.00 Replacment Cost 11.00 13.00 36.00 42.00 45.00 68.00 What journal entry is required at 12/31/22? (Be sure to show all computations and relevant T accounts.) Selling Price 15.00 18.00 48.00 50.00 52.00 80.00 Costs to complete 4.00 3.00 8.00 8.00 8.00 9.00 Normal Profit on Sales 20% 25% 20% 15% 15% 15% Quantity 1,200 1,000 900 800 750 500
Transcribed Image Text:At 12/31/21, the end of Bell Company's first year of business, inventory was $158,800 and $157,900 at cost and at net realizable value, respectively. Bell uses FIFO for valuing inventories, and they apply the lower of cost or net realizable value on an individual item basis to compute the inventory valuation on 12/31/21. Bell uses the allowance method to reduce inventories, as needed. The following table displays information for Bell's inventory at 12/31/22. Product A-1 A-2 B-1 B-2 B-3 C-1 Cost 12.00 13.50 38.40 42.50 44.20 68.00 Replacment Cost 11.00 13.00 36.00 42.00 45.00 68.00 What journal entry is required at 12/31/22? (Be sure to show all computations and relevant T accounts.) Selling Price 15.00 18.00 48.00 50.00 52.00 80.00 Costs to complete 4.00 3.00 8.00 8.00 8.00 9.00 Normal Profit on Sales 20% 25% 20% 15% 15% 15% Quantity 1,200 1,000 900 800 750 500
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