Copperhead Company has provided you with the following information regarding its inventory of copper for September and October. Copperhead uses a perpetual inventory system. September 30 October 31 Copper inventory (in tonnes) Cost per tonne NRV per tonne 2,500 2,000 $505 $535 $540 $520 Instructions (a) Calculate the cost, the net realizable value, and the amount to be reported on the balance sheet for Copperhead's inventory at (1) September 30 and (2) October 31. (b) Prepare any journal entries required to record the LCNRV of the copper inventory at (1) September 30 and (2) October 31. (c) Assume that during the month of November the company did not purchase or sell any copper inventory and that the NRV per tonne was $530 on November 30. Is an adjusting entry required at November 30? Explain. If so, prepare the adjusting entry. (d) What will have to be disclosed in Copperhead's notes to the financial statements with regard to its copper inventory?
Copperhead Company has provided you with the following information regarding its inventory of copper for September and October. Copperhead uses a perpetual inventory system. September 30 October 31 Copper inventory (in tonnes) Cost per tonne NRV per tonne 2,500 2,000 $505 $535 $540 $520 Instructions (a) Calculate the cost, the net realizable value, and the amount to be reported on the balance sheet for Copperhead's inventory at (1) September 30 and (2) October 31. (b) Prepare any journal entries required to record the LCNRV of the copper inventory at (1) September 30 and (2) October 31. (c) Assume that during the month of November the company did not purchase or sell any copper inventory and that the NRV per tonne was $530 on November 30. Is an adjusting entry required at November 30? Explain. If so, prepare the adjusting entry. (d) What will have to be disclosed in Copperhead's notes to the financial statements with regard to its copper inventory?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please solve C and D.
'Part A and B answers are attached, if you need them to help you solve.
Transcribed Image Text:Cost = Inventory x Cost per tonne
Net Realizable Value = Inventory x Net realizable per tonne
Difference = Cost value - NRV
September 30
October 31
Copper Inventory
$2,500
$2,000
Cost per tonne
$505
$535
NRV per tonne
$540
$520
Cost value
$1,262,000
$1,070,000
NRV
$1,350,000
$1,040,000
Lower of Cost value or NRV
$1,262,000
$1,040,000
Difference
$87,500
$30,000
b.)
Date
Accounting Titles and Explanations
Debit
Credit
Sep 30 Allowance to reduce inventory to NRV
$87,500
To cost of goods sold
$87,500
Oct 31 Cost of goods sold
$30,000
To Allowance to reduce inventory to NRV
$30,000
Transcribed Image Text:Copperhead Company has provided you with the following information regarding its inventory of
copper for September and October. Copperhead uses a perpetual inventory system.
September 30
October 31
Copper inventory (in tonnes)
Cost per tonne
NRV per tonne
2,500
2,000
$505
$535
$540
$520
Instructions
(a) Calculate the cost, the net realizable value, and the amount to be reported on the balance sheet for
Copperhead's inventory at (1) September 30 and (2) October 31.
(b) Prepare any journal entries required to record the LCNRV of the copper inventory at (1) September 30
and (2) October 31.
(c) Assume that during the month of November the company did not purchase or sell any copper
inventory and that the NRV per tonne was $530 on November 30. Is an adjusting entry required at
November 30? Explain. If so, prepare the adjusting entry.
(d) What will have to be disclosed in Copperheads notes to the financial statements with regard to its
copper inventory?
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