Healthy Foods reports merchandise inventory at the lower-of-cost-or-market. Prior to releasing its financial statements for the year
Question:
Healthy Foods reports merchandise inventory at the lower-of-cost-or-market. Prior to releasing its financial statements for the year ended March 31, 2026, Healthy Foods’ preliminary income statement, before the year-end adjustments, appears as follows:
Healthy Foods 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 Healthy Foods should report sales, cost of goods sold, and gross profit.
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Related Book For
Horngrens Financial And Managerial Accounting The Financial Chapters
ISBN: 9780137858651
8th Edition
Authors: Tracie Miller Nobles, Brenda Mattison
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