Peterson Furniture Designs is preparing its annual financial statements dated December 31. Ending inventory information about the five major items stocked for regular sale follows: 

Required: 

1. Complete the final two columns of the table and then compute the amount that should be reported for the Ending inventory using the LC&NRV rule applied to each item. 

2. Prepare the journal entry that Peterson Furniture Designs would record on December 31. 

3. If the net realizable value was recovered to an amount greater than original cost by June 30 of the following year, would the journal entry in requirement 2 be reversed under ASPE? Under IFRS?

Transcribed Image Text:

Ending Inventory Unit Cost When Quantity on Hand Net Realizable Value at Item Acquired (FIFO) Year-End LC&NRV per Item Total LC&NRv Alligator Armoires 50 $15 $12 Bear Bureaus 75 40 40 Cougar Beds Dingo Cribs Elephant Dressers 10 50 52 30 30 30 400 10