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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?

FINANCIAL ACCOUNTING
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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Please solve C and D.

'Part A and B answers are attached, if you need them to help you solve.

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: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
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?
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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