PROBLEM 15 (Adapted) Althea Nicole Company is a producer of coffee. The entity is considering the valuation of its harvested coffee beans. Industry practice is to value the coffee beans at market value and uses it as a reference to a local publication. On December 31, 2020, the entity has harvested coffee beans costing P1,500,000 and with a fair value less cost to sell of P1,900,000 at the point of harvest. Because of the long aging and maturation process after harvest, the harvested coffee beans were still on hand on December 31, 2021. On that date, the fair value less cost to sell is P2,000,000, and the net realizable value is P1,850,000. Requirements: 1. How much is the cost of the inventory of coffee beans? 2 What is the LCNRV of the inventory of coffee beans on Dec. 31, 2021? 3. Prepare the journal entry to record the adjustment of inventory on December 31, 2021?

PROBLEM 15 (Adapted) Althea Nicole Company is a producer of coffee. The entity is considering the valuation of its harvested coffee beans. Industry practice is to value the coffee beans at market value and uses it as a reference to a local publication. On December 31, 2020, the entity has harvested coffee beans costing P1,500,000 and with a fair value less cost to sell of P1,900,000 at the point of harvest. Because of the long aging and maturation process after harvest, the harvested coffee beans were still on hand on December 31, 2021. On that date, the fair value less cost to sell is P2,000,000, and the net realizable value is P1,850,000. Requirements: 1. How much is the cost of the inventory of coffee beans? 2 What is the LCNRV of the inventory of coffee beans on Dec. 31, 2021? 3. Prepare the journal entry to record the adjustment of inventory on December 31, 2021?

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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