Problem 7-8: The Cyber Corporation The Cyber Corporation is a manufacturer of MP3 players. Immediately prior to the year end, a competitor released a superior product and it is now apparent that the finished goods inventory is worthless. The following information is available from the unadjusted trial balance: Account Amount Revenue 1000 Inventory 301 Cost of Goods Sold 800 Required: 1. Compute Gross Margin based upon the data from the unadjusted trial balance. 2. Assume that as a result of the competing product, the market value of the ending inventory is $101. Prepare a journal entry to record inventory at the lower of cost or market. 3. Calculate gross margin following the adjustment in part 2. Upon completion, enter the following data here: Gross margin based upon the unadjusted trial balance: Gross margin following the inventory write down: Journal entry to record write down:

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Problem 7-8: The Cyber Corporation
The Cyber Corporation is a manufacturer of MP3 players. Immediately prior to the year end, a competitor released a superior product and
it is now apparent that the finished goods inventory is worthless. The following information is available from the unadjusted trial balance:
Account
Amount
Revenue
1000
Inventory
301
Cost of Goods Sold
800
Required:
1. Compute Gross Margin based upon the data from the unadjusted trial balance.
2. Assume that as a result of the competing product, the market value of the ending inventory is $101. Prepare a journal entry to record
inventory at the lower of cost or market.
3. Calculate gross margin following the adjustment in part 2.
Upon completion, enter the following data here:
Gross margin based upon the unadjusted trial balance:
Gross margin following the inventory write down:
Journal entry to record write down:
Transcribed Image Text:Problem 7-8: The Cyber Corporation The Cyber Corporation is a manufacturer of MP3 players. Immediately prior to the year end, a competitor released a superior product and it is now apparent that the finished goods inventory is worthless. The following information is available from the unadjusted trial balance: Account Amount Revenue 1000 Inventory 301 Cost of Goods Sold 800 Required: 1. Compute Gross Margin based upon the data from the unadjusted trial balance. 2. Assume that as a result of the competing product, the market value of the ending inventory is $101. Prepare a journal entry to record inventory at the lower of cost or market. 3. Calculate gross margin following the adjustment in part 2. Upon completion, enter the following data here: Gross margin based upon the unadjusted trial balance: Gross margin following the inventory write down: Journal entry to record write down:
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