3. North Company is preparing the annual financial statements dated December 31, 2020. Information about inventory stocked for regular sale follows: Item A B C D Quantity Unit Cost When on Hand 100 80 35 75 Acquired $30 25 55 40 Replacement Cost (market) at year end $25 28 58 25 a. Compute the valuation for the December 31, 2020, inventory using the lower of cost or market basis. Make necessary adjusting journal entry(ies) b. Sold 15 units of Item A at $20 each and written-off 5 units of Item D. Make necessary journal entries.

3. North Company is preparing the annual financial statements dated December 31, 2020. Information about inventory stocked for regular sale follows: Item A B C D Quantity Unit Cost When on Hand 100 80 35 75 Acquired $30 25 55 40 Replacement Cost (market) at year end $25 28 58 25 a. Compute the valuation for the December 31, 2020, inventory using the lower of cost or market basis. Make necessary adjusting journal entry(ies) b. Sold 15 units of Item A at $20 each and written-off 5 units of Item D. Make necessary journal entries.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 69BPSB

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Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a cost and net realizable value of 300,000, prepare the journal entry to record the reductions to NRV for Paul Corporation assuming that Paul uses a periodic inventory system and the allowance method. Paul Corporation uses FIFO and reports the following inventory information: Assuming Paul uses a perpetual inventory system and the direct method, prepare the journal entry to record the write-down of inventory.
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