Given the following information for the Raquel Company who uses the periodic inventory system: Date Cost Market December 31, 2018 $500 $500 December 31, 2019 700 650 December 31, 2020 800 730 If the allowance method of recording lower of cost or NRV is in use, which December 31, 2020, journal entry is correct? a. Loss Due to Write-Down on Inventory 70 Allowance to Reduce Inventory to NRV 70 b. Loss Due to Write-Down of Inventory 20 Allowance to Reduce Inventory to NRV 20 c. Allowance to Reduce Inventory to NRV 800 Income Summary 800 d. Inventory 730 Income Summary 730
Given the following information for the Raquel Company who uses the periodic inventory system: Date Cost Market December 31, 2018 $500 $500 December 31, 2019 700 650 December 31, 2020 800 730 If the allowance method of recording lower of cost or NRV is in use, which December 31, 2020, journal entry is correct? a. Loss Due to Write-Down on Inventory 70 Allowance to Reduce Inventory to NRV 70 b. Loss Due to Write-Down of Inventory 20 Allowance to Reduce Inventory to NRV 20 c. Allowance to Reduce Inventory to NRV 800 Income Summary 800 d. Inventory 730 Income Summary 730
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Given the following information for the Raquel Company who uses the periodic inventory system:
If the allowance method of recording lower of cost or NRV is in use, which December 31, 2020,journal entry is correct?
| Date | Cost | Market |
| December 31, 2018 | $500 | $500 |
| December 31, 2019 | 700 | 650 |
| December 31, 2020 | 800 | 730 |
If the allowance method of recording lower of cost or NRV is in use, which December 31, 2020,
a.
| Loss Due to Write-Down on Inventory | 70 | |||
| Allowance to Reduce Inventory to NRV | 70 |
b.
| Loss Due to Write-Down of Inventory | 20 | |||
| Allowance to Reduce Inventory to NRV | 20 |
c.
| Allowance to Reduce Inventory to NRV | 800 | |||
| Income Summary | 800 |
d.
| Inventory | 730 | |||
| Income Summary | 730 |
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