Font Alignment Number LOS XVA C D E 6 ABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete physical inventory at year end. A physical count was taken on December 31, 2021, and the inventory on-hand at that time totaled $50,000, which reflects historical cost. Record the adjusting entry for properly recognizing 2021 Cost of Goods Sold. Hint This was the first year of operations, so beginning inventory balance is zero. Additionally, ABC adheres to GAAP by recording ending inventory at the lower of cost and net realizable value at a total inventory level A review of inventory data further indicated that the current retail sales value of the ending inventory is $45,000 and estimated costs of completion and shipping is 10% of retail Be sure to make an additional adjustment, if necessary, to properly value ending inventory using the Loss and Allowance methodology. For Income Statement presentation purposes, be sure to use the Loss Method for accountis for adjustments of inventory to market value. 7 It would be unusual for a company to have an asset impairment in Year 1, but for the sake of this example, ABC determined that their intangible asset might be impaired on December 31, 2021. Record the impairment adjustment, if any. The expected future undiscounted net cash flows for this intangible asset totals $175,000, and the fair value of the asset is $165,000. 8 On 7/1/21, ABC purchased 5,000 shares of its own stock from existing stockholders as treasury stock. The cost of the treasury stock was $10 per share, or $50,000 in total The effects of this transaction are already shown in the unadjusted trial balance. On 12/31/ ABC reissued 2,000 shares of the treasury stock at $15 per share. Record the journal entry required for the reissuance of the treasury stock To refresh your memory, treasury stock is usually accounted for at cost. When treasury stock is reissued for more than its cost, a separat Paid-in Capital-Treasury Stock account should be used to account for the excess proceeds over cost. (See your Principles of Accounting of Chapter 18 of your Intermediate Accounting textbook for a review 0 0. 19/21 /21 605- -. .. ADAL. -.. Adjustments Needed Amortization Table Adjusting Journal Entries Adjusted Trial Balance 12-31-21 Accessibility Investigate 82-F Mostly cloudy Q L ASUS VivoB