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Kingbird 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 $348,040 12/31/26 439,900 Net Realizable Value $326.220 421,780 (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 tities 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 problems)

Kingbird 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 $348,040 12/31/26 439,900 Net Realizable Value $326.220 421,780 (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 tities 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 problems)

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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(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 O for the amounts. Record journal entries in the order presented in the problem.) Account Titles and Explanation Date 12/31/25 - 12/31/26 Loss Due to Decline of Inventory to NRV Allowance to Reduce Inventory to NRV Allowance to Reduce Inventory to NRV Recovery of Loss Inventory Recovery of Los Inventory (c) Which of the two methods above provides the higher net income in each year? Both methods have the same effect Debit 21820 3700 Credit 21820 3700
Transcribed Image Text:(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 O for the amounts. Record journal entries in the order presented in the problem.) Account Titles and Explanation Date 12/31/25 - 12/31/26 Loss Due to Decline of Inventory to NRV Allowance to Reduce Inventory to NRV Allowance to Reduce Inventory to NRV Recovery of Loss Inventory Recovery of Los Inventory (c) Which of the two methods above provides the higher net income in each year? Both methods have the same effect Debit 21820 3700 Credit 21820 3700
Kingbird 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 $348,040 12/31/26 Date 12/31/25 439.900 (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 tities 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.) Account Titles and Explanation 12/31/26 Net Realizable Value $326.220 Cost of Goods Sold 421,780 Allowance to Reduce Inventory to NRV Allowance to Reduce Inventory to NRV Cost of Goods Sold Debit 21.820 3700 Credit 21820 3700
Transcribed Image Text:Kingbird 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 $348,040 12/31/26 Date 12/31/25 439.900 (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 tities 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.) Account Titles and Explanation 12/31/26 Net Realizable Value $326.220 Cost of Goods Sold 421,780 Allowance to Reduce Inventory to NRV Allowance to Reduce Inventory to NRV Cost of Goods Sold Debit 21.820 3700 Credit 21820 3700
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