The following data relates to the 12/31/22 inventory of Cushing: Item A B C D E...

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The following data relates to the 12/31/22 inventory of Cushing: Item A B C D E Original Cost per Unit $1.10 0.90 1.80 0.70 1.90 Selling price is $2.00 per unit for all items. Disposal costs amount to 15% of selling price, and a normal profit is 40% of selling price. There are 1,000 units of each item in the 12/31/22 inventory a. Prepare the entry at 12/31/21 necessary to implement the lower of cost or NRV procedure assuming Cushing uses a contra account (Allowance) for its balance. b. Determine the lower of cost or NRV for the inventory at 12/31/22. c. Prepare the entries necessary at 12/31/22 based your computations. d. How are inventory losses disclosed on the income statement for 2022? e. Assume, instead, that Cushing uses the LIFO inventory costing assumption. What would be different about your response to the questions above? The following data relates to the 12/31/22 inventory of Cushing: Item A B C D E Original Cost per Unit $1.10 0.90 1.80 0.70 1.90 Selling price is $2.00 per unit for all items. Disposal costs amount to 15% of selling price, and a normal profit is 40% of selling price. There are 1,000 units of each item in the 12/31/22 inventory a. Prepare the entry at 12/31/21 necessary to implement the lower of cost or NRV procedure assuming Cushing uses a contra account (Allowance) for its balance. b. Determine the lower of cost or NRV for the inventory at 12/31/22. c. Prepare the entries necessary at 12/31/22 based your computations. d. How are inventory losses disclosed on the income statement for 2022? e. Assume, instead, that Cushing uses the LIFO inventory costing assumption. What would be different about your response to the questions above?

Answer rating: 100% (QA)

a Entry at 123121 to Implement Lower of Cost or NRV Procedure To implement the lower of cost or net realizable value NRV procedure an allowance accoun... View the full answer