The following inventory information pertains to Prodigal Company on December 31, 2015. Appliances Car Accessories ProductA Product B Product C Product D Units on hand 1,000 600 1,200 1,600 Unit Cost 2,500 3,700 1,400 2,100 Netrealizable value 2,700 3,600 2,000 2,000 28.) Determine the inventory value on December 31, 2015, assuming the entity applied the lower of cost or netrealizable value. 29.) Under the direct method, what is the entry to be prepared by the company to recognize the amount of inventory? 30.) Under the allowance method, what is the entry to be prepared by the company to recognize the amount of inventory? 31.) Under the allowance method, what is the entry to be prepared by the company to recognize the amount of inventory and the related contra asset account? 32.) Assume that on December 31, 2016, the inventory at cost amounted to P5,000,000 and the net realizable value is P4,990,000, prepare the necessary entries to recognize the amount of inventory under the direct method. 33.) Assume that on December 31, 2016, the inventory at cost amounted to P5,000,000 and the netrealizable value is P4,990,000, prepare the necessary entries to recognize the amount of inventory under the allowance method. 34.) How is loss on inventory write down being presented in the income statement? 35.) How is gain on reversal of inventory write down being presented in the income statements?
The following inventory information pertains to Prodigal Company on December 31, 2015. Appliances Car Accessories ProductA Product B Product C Product D Units on hand 1,000 600 1,200 1,600 Unit Cost 2,500 3,700 1,400 2,100 Netrealizable value 2,700 3,600 2,000 2,000 28.) Determine the inventory value on December 31, 2015, assuming the entity applied the lower of cost or netrealizable value. 29.) Under the direct method, what is the entry to be prepared by the company to recognize the amount of inventory? 30.) Under the allowance method, what is the entry to be prepared by the company to recognize the amount of inventory? 31.) Under the allowance method, what is the entry to be prepared by the company to recognize the amount of inventory and the related contra asset account? 32.) Assume that on December 31, 2016, the inventory at cost amounted to P5,000,000 and the net realizable value is P4,990,000, prepare the necessary entries to recognize the amount of inventory under the direct method. 33.) Assume that on December 31, 2016, the inventory at cost amounted to P5,000,000 and the netrealizable value is P4,990,000, prepare the necessary entries to recognize the amount of inventory under the allowance method. 34.) How is loss on inventory write down being presented in the income statement? 35.) How is gain on reversal of inventory write down being presented in the income statements?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following inventory information pertains to Prodigal Company on December 31, 2015.
Appliances
Car Accessories
ProductA
Product B
ProductC
Product D
Units on hand
1,000
600
1,200
1,600
Unit Cost
2,500
3,700
1,400
2,100
Netrealizable value
2,700
3,600
2,000
2,000
28.) Determine the inventory value on December 31, 2015, assuming the entity applied the lower of costor netrealizable
value.
29.) Under the direct method, what is the entry to be prepared by the company to recognize the amount of inventory?
30.) Under the allowance method, what is the entry to be prepared by the company to recognize the amount of
inventory?
31.) Under the allowance method, what is the entry to be prepared by the company to recognize the amount of inventory
and the related contra asset account?
32.) Assume that on December 31, 2016, the inventory at cost amounted to P5,000,000 and the net realizable value is
P4,990,000, preparethe necessary entriesto recognize the amount of inventory under the direct method.
33.) Assume that on December 31, 2016, the inventory at cost amounted to P5,000,000 and the netrealizable value is
P4,990,000, preparethe necessary entries to recognize the amount of inventory under the allowance method.
34.) How is loss on inventory write down being presented in the income statement?
35.) How is gain on reversal of inventory write down being presented in the income statements?
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