Oriole Corporation had the following items in inventory as at December 31, 2020: Item No. Quantity Unit Cost NRV A1 180 $2.90 $2.90 B4 140 1.40 0.50 C2 220 9.10 10.60 D3 90 6.60 6.50 Assume that Oriole uses a periodic inventory system, and that none of the inventory items can be grouped together for accounting purposes. The opening inventory on January 1, 2020, was $3,200 in total. Prepare the year-end adjusting entries required to adjust to the lower of cost or net realizable value using the direct method. (Credit account titles are automatically indented when the 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.) Direct Method: Date Account Titles and Explanation Debit Credit December 31, 2020 (To transfer out beginning inventory balance) December 31, 2020 (To record ending inventory at LC and NRV) List of Accounts Prepare the year-end adjusting entries required to adjust to the lower of cost or net realizable value using the indirect method. (Credit account titles are automatically indented when the 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.) Indirect Method: Date Account Titles and Explanation Debit Credit December 31, 2020 (To transfer out beginning inventory balance) December 31, 2020 (To record ending inventory at cost) December 31, 2020 (To write-down inventory to lower NRV)

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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Oriole Corporation had the following items in inventory as at December 31, 2020:

Item No.		Quantity		Unit Cost	NRV
	A1		180		$2.90	$2.90
	B4		140		1.40	0.50
	C2		220		9.10	10.60
	D3		90		6.60	6.50

Assume that Oriole uses a periodic inventory system, and that none of the inventory items can be grouped together for accounting purposes. The opening inventory on January 1, 2020, was $3,200 in total.

Prepare the year-end adjusting entries required to adjust to the lower of cost or net realizable value using the direct method. (Credit account titles are automatically indented when the 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.)

Direct Method:

Date	Account Titles and Explanation	Debit	Credit
December 31, 2020

	(To transfer out beginning inventory balance)
December 31, 2020

	(To record ending inventory at LC and NRV)

List of Accounts

Prepare the year-end adjusting entries required to adjust to the lower of cost or net realizable value using the indirect method. (Credit account titles are automatically indented when the 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.)

Indirect Method:

Date	Account Titles and Explanation	Debit	Credit
December 31, 2020

	(To transfer out beginning inventory balance)
December 31, 2020

	(To record ending inventory at cost)
December 31, 2020

	(To write-down inventory to lower NRV)

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