Cullumber Company uses a periodic inventory system and the average cost method. At December 31, 2025, the following information has been compiled for its finished goods inventory: Replacement value Cost Expected selling price Normal profit margin Selling costs $13100 $14500 $15100 15% 5% of expected selling price After applying LCNRV, Cullumber, which uses the cost of goods sold method to record inventory write-downs, will make an entry Odebiting Cost of Goods Sold for $155. O crediting Cost of Goods Sold for $1400. O debiting Inventory Loss for $600. O crediting Inventory for $600.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Cullumber Company uses a periodic inventory system and the average cost method. At December 31, 2025, the following information
has been compiled for its finished goods inventory:
Replacement value
Cost
Expected selling price
Normal profit margin
Selling costs
$13100
$14500
$15100
15%
5% of expected selling price
After applying LCNRV. Cullumber, which uses the cost of goods sold method to record inventory write-downs, will make an entry
Odebiting Cost of Goods Sold for $155.
O crediting Cost of Goods Sold for $1400.
O debiting Inventory Loss for $600.
Ⓒcrediting Inventory for $600.
Transcribed Image Text:1 Cullumber Company uses a periodic inventory system and the average cost method. At December 31, 2025, the following information has been compiled for its finished goods inventory: Replacement value Cost Expected selling price Normal profit margin Selling costs $13100 $14500 $15100 15% 5% of expected selling price After applying LCNRV. Cullumber, which uses the cost of goods sold method to record inventory write-downs, will make an entry Odebiting Cost of Goods Sold for $155. O crediting Cost of Goods Sold for $1400. O debiting Inventory Loss for $600. Ⓒcrediting Inventory for $600.
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