Question

Naturally Good Foods reports merchandise inventory at the lower of cost or market. Prior to releasing its financial statements for the year ended March 31, 2015, Naturally’s preliminary income statement, before the year- end adjustments, appears as follows:
NATURALLY GOOD FOODS
Income Statement (Partial)
Year Ended March 31, 2015
Sales Revenue ............ $ 72,000
Cost of Goods Sold ......... 45,000
Gross Profit ............. $ 117,000
Naturally has determined that the current replacement cost of ending merchandise inventory is $ 17,000. Cost is $ 18,000.

Requirements
1. Journalize the adjusting entry for merchandise inventory, if any is required.
2. Prepare a revised partial income statement to show how Naturally Good Foods should report sales, cost of goods sold, and gross profit.



$1.99
Sales4
Views166
Comments0
  • CreatedJanuary 16, 2015
  • Files Included
Post your question
5000