The inventories of Berry Company for the years 2019 and 2020 are as follows: Cost NRV January 1, 2019 $10,000 $10,000 December 31, 2019 13,000 11,500 December 31, 2020 15,000 14,000
The inventories of Berry Company for the years 2019 and 2020 are as follows:
Cost NRV
January 1, 2019 $10,000 $10,000
December 31, 2019 13,000 11,500
December 31, 2020 15,000 14,000
Berry uses the periodic inventory method and the FIFO inventory cost flow assumption.
Required:
1. Assume the inventory that existed at the end of 2019 was sold in 2020. Prepare the necessary
a. direct method
b. allowance method
2. Refer to your answer for E8-6. How does the use of a periodic or perpetual inventory system affect the valuation of inventory?
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