Dover Company began operations in 2025 and determined its ending inventory at cost and at LCNRV at
Question:
Dover 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.
Instructions
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.
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.
c. Which of the two methods above provides the higher net income in each year?
12/31/25 12/31/26 Cost $346,000 410,000 Net Realizable Value $322,000 390,000
Step by Step Answer:
December 31 2025 a Cost of Goods Sold 346000 322000 24000 ...View the full answer
Intermediate Accounting
ISBN: 9781119790976
18th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Related Video
A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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