Entries for Lower-of-Cost-or-Market'Direct and Allowance Malone Company determined its ending inventory at cost and at lower-of-cost-or-market at
Question:
Entries for Lower-of-Cost-or-Market'Direct and Allowance Malone Company determined its ending inventory at cost and at lower-of-cost-or-market at December 31, 2009, December 31, 2010, and December 31, 2011, as shown below.
(a) Prepare the journal entries required at December 31, 2010, and at December 31, 2011, assuming that a perpetual inventory system and the direct method of adjusting to lower-of-cost-or-market is used.
(b) Prepare the journal entries required at December 31, 2010, and at December 31, 2011, assuming that a perpetual inventory is recorded at cost and reduced to lower-of-cost-or-market through the use of an allowance account (indirectmethod).
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
Step by Step Answer:
a b Cost of Goods Sold Inventory Cost of Goods Sold Inventory 123110 Direct Method ...View the full answer
Intermediate Accounting
ISBN: 978-0470423684
13th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
