Question: The following information is for Takin Enterprises Ltd. Instructions (a) Using the above information, prepare monthly income statements (as far as the data permit) in

The following information is for Takin Enterprises Ltd.

Instructions
(a) Using the above information, prepare monthly income statements (as far as the data permit) in colunmar form for February, March, and April. Show the inventory in the statement at cost; show the gain or loss due to fluctuations in NRV separately. Takin uses the indirect or allowance method.
(b) Prepare the journal entry that is needed to establish the valuation account at January 31 and the entries to adjust it at the end of each month after that.

Jan. 31 $25,000 24,500 Apr. 30 $23,000 Feb. 28 Mar. 31 $25,100 $29,000 Inventory at cost Inventory at the lower of cost and net realizable value Purchases for the month Sales for the month 17,600 20,000 29,000 22,600 24,000 35,000 17,300 26,500 40,000

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