Q1： Explain why companies are required to use lower-of-cost-or-net-realizable value rule for inventory under IFRS? Q2: Malone Company determined its ending inventory at cost and at LCNRV at December 31, 2022, December 31, 2023, and December 31, 2024, as shown below. Cost LCNRV 12/31/22 $650,000 $650,000 12/31/23 780,000 712,000 12/31/24 905,000 830,000 Instructions Prepare the journal entries required at December 31, 2023, and at December 31, 2024, assuming that a perpetual inventory system and the cost-of-goods-sold method of adjusting to LCNRV are used. Prepare the journal entries required at December 31, 2023, and at December 31, 2024, assuming that a perpetual inventory is recorded at cost and reduced to LCNRV using the loss method.
Q1： Explain why companies are required to use lower-of-cost-or-net-realizable value rule for inventory under IFRS? Q2: Malone Company determined its ending inventory at cost and at LCNRV at December 31, 2022, December 31, 2023, and December 31, 2024, as shown below. Cost LCNRV 12/31/22 $650,000 $650,000 12/31/23 780,000 712,000 12/31/24 905,000 830,000 Instructions Prepare the journal entries required at December 31, 2023, and at December 31, 2024, assuming that a perpetual inventory system and the cost-of-goods-sold method of adjusting to LCNRV are used. Prepare the journal entries required at December 31, 2023, and at December 31, 2024, assuming that a perpetual inventory is recorded at cost and reduced to LCNRV using the loss method.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 36BE: Effects of Inventory Costing Methods Refer to the information for Tyler Company above. Required: 1....
Related questions
Question
Q1：
Explain why companies are required to use lower-of-cost-or-net-realizable value rule for inventory under IFRS?
Q2:
Malone Company determined its ending inventory at cost and at LCNRV at December 31, 2022, December 31, 2023, and December 31, 2024, as shown below.
|
Cost |
LCNRV |
|
|
12/31/22 |
$650,000 |
$650,000 |
|
12/31/23 |
780,000 |
712,000 |
|
12/31/24 |
905,000 |
830,000 |
Instructions
- Prepare the journal entries required at December 31, 2023, and at December 31, 2024, assuming that a perpetual inventory system and the cost-of-goods-sold method of adjusting to LCNRV are used.
Prepare the journal entries required at December 31, 2023, and at December 31, 2024, assuming that a perpetual inventory is recorded at cost and reduced to LCNRV using the loss method.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Financial & Managerial Accounting
Accounting
ISBN:
9781285866307
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:
9781305653535
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning