Waterway Company began operations in 2025 and determined its ending inventory at cost and at LCNRV at December 31, 2025, and December 31, 2026. This information is presented below. 12/31/25 12/31/26 Date (a) Prepare the journal entries required at December 31, 2025, and December 31, 2026, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods-sold method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) 12/31/25 12/31/26 Cost $356,450 443,620 Date Net Realizable Value $331,660 422,750 12/31/25 ✓ 12/31/26 Account Titles and Explanation Cost of Goods Sold Allowance to Reduce Inventory to Market Allowance to Reduce Inventory to Market Allowance to Reduce Inventory to NRV Account Titles and Explanation Loss Due to Market Decline of Inventory Allowance to Reduce Inventory to NRV (b) Prepare journal entries required at December 31, 2025, and December 31, 2026, assuming inventory is recorded at LCNRV and a perpetual system using the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Allowance to Reduce Inventory to NRV Debit Loss Due to Market Decline of Inventory 24790 Debit 3920 24790 Credit 3920 2479 Credit 3920 2479 3920
Waterway Company began operations in 2025 and determined its ending inventory at cost and at LCNRV at December 31, 2025, and December 31, 2026. This information is presented below. 12/31/25 12/31/26 Date (a) Prepare the journal entries required at December 31, 2025, and December 31, 2026, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods-sold method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) 12/31/25 12/31/26 Cost $356,450 443,620 Date Net Realizable Value $331,660 422,750 12/31/25 ✓ 12/31/26 Account Titles and Explanation Cost of Goods Sold Allowance to Reduce Inventory to Market Allowance to Reduce Inventory to Market Allowance to Reduce Inventory to NRV Account Titles and Explanation Loss Due to Market Decline of Inventory Allowance to Reduce Inventory to NRV (b) Prepare journal entries required at December 31, 2025, and December 31, 2026, assuming inventory is recorded at LCNRV and a perpetual system using the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Allowance to Reduce Inventory to NRV Debit Loss Due to Market Decline of Inventory 24790 Debit 3920 24790 Credit 3920 2479 Credit 3920 2479 3920
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Waterway Company began operations in 2025 and determined its ending inventory at cost and at LCNRV at December 31, 2025, and
December 31, 2026. This information is presented below.
Cost
12/31/25 $356,450
12/31/26
Date
(a) Prepare the journal entries required at December 31, 2025, and December 31, 2026, assuming inventory is recorded at LCNRV and
a perpetual inventory system using the cost-of-goods-sold method. (List all debit entries before credit entries. Credit account titles are
automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter
O for the amounts. Record journal entries in the order presented in the problem.)
12/31/25
12/31/26
443,620
Date
12/31/25
Net Realizable Value
$331,660
422,750
12/31/26
Account Titles and Explanation
Cost of Goods Sold
Allowance to Reduce Inventory to Market
Allowance to Reduce Inventory to Market
Allowance to Reduce Inventory to NRV
Account Titles and Explanation
Loss Due to Market Decline of Inventory
Allowance to Reduce Inventory to NRV
Allowance to Reduce Inventory to NRV
Debit
(b) Prepare journal entries required at December 31, 2025, and December 31, 2026, assuming inventory is recorded at LCNRV and a
perpetual system using the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account tities and enter O for the amounts. Record
journal entries in the order presented in the problem.)
Loss Due to Market Decline of Inventory
24790
Debit
3920
24790
Credit
3920
24791
Credit
3920
24791
392(
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