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The records of Loren Company show the following inventory data. Cost Year 1 Beginning inventory $19,200 Year 1 Ending inventory 24,000 Year 2 Ending inventory 38,400 Year 3 Ending inventory Year 4 Ending inventory Year 5 Ending inventory Year 6 Ending inventory 19,200 57,600 38,400 48,000 Net Realizable Value $19,200 28,800 36,000 14,400 48,000 33,600 52,800 Record the journal entry required for each year, Year 1 through Year 6, to apply the lower of cost or net realizable value rule to inventory assuming that the company adjusts inventory through the allowance account and adjusts equity through cost of goods sold. Assume that the allowance is only adjusted at the end of the year and that for each year, all of the beginning inventory is sold by the end of the year. • Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero).

The records of Loren Company show the following inventory data. Cost Year 1 Beginning inventory $19,200 Year 1 Ending inventory 24,000 Year 2 Ending inventory 38,400 Year 3 Ending inventory Year 4 Ending inventory Year 5 Ending inventory Year 6 Ending inventory 19,200 57,600 38,400 48,000 Net Realizable Value $19,200 28,800 36,000 14,400 48,000 33,600 52,800 Record the journal entry required for each year, Year 1 through Year 6, to apply the lower of cost or net realizable value rule to inventory assuming that the company adjusts inventory through the allowance account and adjusts equity through cost of goods sold. Assume that the allowance is only adjusted at the end of the year and that for each year, all of the beginning inventory is sold by the end of the year. • Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero).

FINANCIAL ACCOUNTING
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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Recording Inventory at Lower of Cost or Net Realizable Value The records of Loren Company show the following inventory data. Cost Year 1 Beginning inventory $19,200 Year 1 Ending inventory 24,000 Year 2 Ending inventory 38,400 Year 3 Ending inventory 19,200 Year 4 Ending inventory 57,600 38,400 Year 5 Ending inventory Year 6 Ending inventory 48,000 Record the journal entry required for each year, Year 1 through Year 6, to apply the lower of cost or net realizable value rule to inventory assuming that the company adjusts inventory through the allowance account and adjusts equity through cost of goods sold. Assume that the allowance is only adjusted at the end of the year and that for each year, all of the beginning inventory is sold by the end of the year. Date Dec. 31, Year 1 • Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Dec. 31, Year 2 Dec. 31, Year 3 Dec. 31, Year 4 Dec. 31, Year 5 Net Realizable Value Dec. 31, Year 6 Check To record adjustment. To record adjustment. To record adjustment. To record adjustment. $19,200 28,800 36,000 14,400 48,000 33,600 52,800 To record adjustment. To record adjustment. Account Name >> >> >> くく くく くく Dr. Cr.
Transcribed Image Text:Recording Inventory at Lower of Cost or Net Realizable Value The records of Loren Company show the following inventory data. Cost Year 1 Beginning inventory $19,200 Year 1 Ending inventory 24,000 Year 2 Ending inventory 38,400 Year 3 Ending inventory 19,200 Year 4 Ending inventory 57,600 38,400 Year 5 Ending inventory Year 6 Ending inventory 48,000 Record the journal entry required for each year, Year 1 through Year 6, to apply the lower of cost or net realizable value rule to inventory assuming that the company adjusts inventory through the allowance account and adjusts equity through cost of goods sold. Assume that the allowance is only adjusted at the end of the year and that for each year, all of the beginning inventory is sold by the end of the year. Date Dec. 31, Year 1 • Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). Dec. 31, Year 2 Dec. 31, Year 3 Dec. 31, Year 4 Dec. 31, Year 5 Net Realizable Value Dec. 31, Year 6 Check To record adjustment. To record adjustment. To record adjustment. To record adjustment. $19,200 28,800 36,000 14,400 48,000 33,600 52,800 To record adjustment. To record adjustment. Account Name >> >> >> くく くく くく Dr. Cr.
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