Information about the ending inventories of Charleston Chair Company, who applies the LIFO method, is shown below:
Fantastic news! We've Found the answer you've been seeking!
Question:
Information about the ending inventories of Charleston Chair Company, who applies the LIFO method, is shown below:
Current | Normal | ||||
Replacement | Selling | Cost of | Profit | ||
Year | Cost | Cost | Price | Completion | Margin |
2020 | $10,000 | $11,500 | $12,000 | $1,000 | $1,100 |
2021 | 15,000 | 13,000 | 14,000 | 1,500 | 1,250 |
2022 | 20,000 | 18,600 | 24,000 | 2,200 | 2,900 |
Required:
a. | Determine the value of the inventory for each year using the lower of cost or market rule. | |
b. | Assuming that Charleston Chair Company maintains a periodic inventory system, prepare journal entries for 2022 to record the reduction of the inventory to market value using: | |
(1) | the direct method | |
(2) | the allowance method |
Related Book For
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Posted Date: