Coronado Company began operations in 2025 and determined its ending inventory at cost and at LCNRV at December 31, 2025, and December 31, 2026. This information is presented below. Cost 12/31/25 $356,040 427,030 12/31/26 (a) Prepare the journal entries required at December 31, 2025, and December 31, 2026, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods-sold method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem) Date 12/31/25 v 12/31/26 Date Net Realizable Value $331,940 407,300 12/31/25 12/31/26 v Account Titles and Explanation Cost of Goods Sold Allowance to Reduce Inventory to NRV Allowance to Reduce Inventory to NRV Cost of Goods Sold Account Titles and Explanation Loss Due to Decline of Inventory to NRV Allowance to Reduce Inventory to NRV (b) Prepare journal entries required at December 31, 2025, and December 31, 2026, assuming inventory is recorded at LCNRV and a perpetual system using the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when 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. Record journal entries in the order presented in the problem.) Allowance to Reduce Inventory to NRV Debit Recovery of Loss Inventory 24100 Debit 4370 24100 Credit 4370 24100 Credit 4370 24100 4370

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.