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Record the journal entry required for each year, 2018 through 2023, to adjust the allowance to reduce inventory to net realizable value. 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. Adjust cost of goods sold for any necessary adjustments.

Record the journal entry required for each year, 2018 through 2023, to adjust the allowance to reduce inventory to net realizable value. 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. Adjust cost of goods sold for any necessary adjustments.

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 2018 Beginning inventory $12,800 Net Realizable Value $12,800 2018 Ending inventory 16,000 19,200 2019 Ending inventory 25,600 24,000 2020 Ending inventory 12,800 9,600 2021 Ending inventory 38,400 32,000 2022 Ending inventory 25,600 2023 Ending inventory 32,000 22,400 35,200 Record the journal entry required for each year, 2018 through 2023, to adjust the allowance to reduce inventory to net realizable value. 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. Adjust cost of goods sold for any necessary adjustments. Note: If a line in a journal entry isn't required for the transactions, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero). Date Account Name Dr. Cr. Dec. 31, 2018 N/A 0 ✓ 0 N/A ÷ ✓ Dec. 31, 2019 Cost of Goods Sold 0 ✓ 3,200 x 0 ✓ Allowance to Reduce Inventory to Net Realizable Value 0 ☑ 0 ✓ 3,200 x Dec. 31, 2020 Cost of Goods Sold = 0 × 0 ✓ Allowance to Reduce Inventory to Net Realizable Value 0 ✓ 0 × Dec. 31, 2021 Cost of Goods Sold ÷ 0 × 0 ✓ Allowance to Reduce Inventory to Net Realizable Value → ✓ 0 ✓ 0 × Dec. 31, 2022 Cost of Goods Sold ÷ × 0 × 0 ✓ Dec. 31, 2023 Cost of Goods Sold Allowance to Reduce Inventory to Net Realizable Value ◆ × ÷ 0 ✓ 0 × × 0 × 0 ✓ Allowance to Reduce Inventory to Net Realizable Value × 0 ✓ 0 ×
Transcribed Image Text:Recording Inventory at Lower-of-Cost-or-Net Realizable Value The records of Loren Company show the following inventory data. Cost 2018 Beginning inventory $12,800 Net Realizable Value $12,800 2018 Ending inventory 16,000 19,200 2019 Ending inventory 25,600 24,000 2020 Ending inventory 12,800 9,600 2021 Ending inventory 38,400 32,000 2022 Ending inventory 25,600 2023 Ending inventory 32,000 22,400 35,200 Record the journal entry required for each year, 2018 through 2023, to adjust the allowance to reduce inventory to net realizable value. 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. Adjust cost of goods sold for any necessary adjustments. Note: If a line in a journal entry isn't required for the transactions, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero). Date Account Name Dr. Cr. Dec. 31, 2018 N/A 0 ✓ 0 N/A ÷ ✓ Dec. 31, 2019 Cost of Goods Sold 0 ✓ 3,200 x 0 ✓ Allowance to Reduce Inventory to Net Realizable Value 0 ☑ 0 ✓ 3,200 x Dec. 31, 2020 Cost of Goods Sold = 0 × 0 ✓ Allowance to Reduce Inventory to Net Realizable Value 0 ✓ 0 × Dec. 31, 2021 Cost of Goods Sold ÷ 0 × 0 ✓ Allowance to Reduce Inventory to Net Realizable Value → ✓ 0 ✓ 0 × Dec. 31, 2022 Cost of Goods Sold ÷ × 0 × 0 ✓ Dec. 31, 2023 Cost of Goods Sold Allowance to Reduce Inventory to Net Realizable Value ◆ × ÷ 0 ✓ 0 × × 0 × 0 ✓ Allowance to Reduce Inventory to Net Realizable Value × 0 ✓ 0 ×
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