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
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 6E: Inventory Write-Down The inventories of Berry Company for the years 2019 and 2020 are as follows:...
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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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