Question: Due to a nationwide recession Liquidation Universe s merchandise inventory is

Due to a nationwide recession, Liquidation Universe’s merchandise inventory is gathering dust. It is now October 31, 2012, and the $163,300 that Liquidation Universe paid for its ending inventory is $15,900 higher than current replacement cost. Before any adjustments at the end of the period, Liquidation Universe’s Cost of Goods Sold account has a balance of $614,000. Liquidation Universe uses lower of cost or market to value its ending inventory.

1. What amount should Liquidation Universe report for inventory on the balance sheet?
2. What amount should Liquidation Universe report for cost of goods sold?
3. Journalize any required entries.

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  • CreatedApril 29, 2014
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