Tasty's Chocolate Store paid $6,000 for Easter Egg inventory on March 15th. By April 30th (2 weeks
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Question:
Tasty's Chocolate Store paid $6,000 for Easter Egg inventory on March 15th. By April 30th (2 weeks after Easter), the seasonal inventory can only be sold to customers for $4,000, and the decline in value appears permanent. In order to sell the inventory quickly, an on line advertisement must be taken out for $500 other wise it is unlikely they will sell the Easter Eggs at all.
(a) Prepare the required Journal Entry for the above situation?
(b) What is the balance in the Inventory account after your Journal Entry?
(c) Explain why Accounting Principles require you to make this Journal Entry?
Related Book For
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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