Vasquez Paper Company has provided you with the following information regarding its inventory of paper for June

Question:

Vasquez Paper Company has provided you with the following information regarding its inventory of paper for June and July. Vasquez uses a perpetual inventory system.
_________________________________ June 30 _________ July 31
Paper inventory (In tonnes) ................ 4,500 .................. 6,200
Cost per tone ................................. $560 .................. $680
NRV per tone ............................... $650 ................... $615
Instructions
(a) Calculate the cost, the net realizable value, and the amount to be reported on the for Vasquez Paper Company's inventory at
(1) June 30 and
(2) July 31.
(b) Prepare any journal entries required to record the LCNRV of the paper inventory at
(1) June 30 and
(2) July 31.
(c) Assume that during the month of August, the company did not purchase any additional paper inventory. Assume also that on August 31 it had 5,000 tonnes in inventory and the NRV per tonne was $720. Is an adjusting entry required at August 31? Explain. If so, prepare the adjusting entry.
(d) What is Vasquez Paper Company required to disclose in its notes to the with regard to LCNRV?
Taking It Further
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