Question: Some of M and T Electronics merchandise is gathering dust

Some of M and T Electronics’ merchandise is gathering dust. It is now December 31, 2015, and the current replacement cost of the ending merchandise inventory is $ 20,000 below the business’s cost of the goods, which was $ 100,000. Before any adjustments at the end of the period, the company’s Cost of Goods Sold account has a balance of $ 410,000.

Requirements
1. Journalize any required entries.
2. At what amount should the company report merchandise inventory on the ­balance sheet?
3. At what amount should the company report cost of goods sold on the income statement?
4. Which accounting principle or concept is most relevant to this situation?


View Solution:


Sale on SolutionInn
Sales3
Views123
Comments
  • CreatedJanuary 16, 2015
  • Files Included
Post your question
5000