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Sunland 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 $354,760 12/31/26 417,750 (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) Date 12/31/25 Net Realizable Value $328,570 395,700 12/31/26 Account Titles and Explanation Cost of Goods Sold Allowance to Reduce Inventory to NRV Allowance to Reduce Inventory to NRV Cost of Goods Sold Debit 26190 4140 Credit 26190 4140

Sunland 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 $354,760 12/31/26 417,750 (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) Date 12/31/25 Net Realizable Value $328,570 395,700 12/31/26 Account Titles and Explanation Cost of Goods Sold Allowance to Reduce Inventory to NRV Allowance to Reduce Inventory to NRV Cost of Goods Sold Debit 26190 4140 Credit 26190 4140

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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Sunland 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 $354,760 12/31/26 Date 12/31/25 417,750 (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.) 12/31/26 Net Realizable Value $328,570 395,700 Account Titles and Explanation Cost of Goods Sold Allowance to Reduce Inventory to NRV Allowance to Reduce Inventory to NRV Cost of Goods Sold Debit 26190 4140 Credit 26190 4140
Transcribed Image Text:Sunland 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 $354,760 12/31/26 Date 12/31/25 417,750 (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.) 12/31/26 Net Realizable Value $328,570 395,700 Account Titles and Explanation Cost of Goods Sold Allowance to Reduce Inventory to NRV Allowance to Reduce Inventory to NRV Cost of Goods Sold Debit 26190 4140 Credit 26190 4140
(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.) Date 12/31/25 12/31/26 Account Titles and Explanation Loss Due to Decline of Inventory to NRV Allowance to Reduce Inventory to NRV Allowance to Reduce Inventory to NRV Recovery of Loss Inventory (c) Which of the two methods above provides the higher net income in each year? Both methods have the same effect Debit 26190 4140 Credit 26190 4140
Transcribed Image Text:(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.) Date 12/31/25 12/31/26 Account Titles and Explanation Loss Due to Decline of Inventory to NRV Allowance to Reduce Inventory to NRV Allowance to Reduce Inventory to NRV Recovery of Loss Inventory (c) Which of the two methods above provides the higher net income in each year? Both methods have the same effect Debit 26190 4140 Credit 26190 4140
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