Chapter 8, Problem 13RE

Refer to the information provided in RE8-4. If Paul Corporation’s inventory at January 1, 2019, had a cost and net realizable value of $300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the direct method.

Paul Corporation uses FIFO and reports the following inventory information:

Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.