ABC Company experienced a decline in the value of its inventory in 2020 which resulted in a write-down from a cost of P2,400,000 to net realizable value of P1,650,000. The entity’s practice is to use the allowance method in recording necessary adjustments. In 2021, market conditions have improved and on December 31, 2021, the inventory had a cost of P4,200,000 and net realizable value of 3,750,000. Compute for the amount of gain on reversal of inventory write-down on December 31, 2021.
ABC Company experienced a decline in the value of its inventory in 2020 which resulted in a write-down from a cost of P2,400,000 to net realizable value of P1,650,000. The entity’s practice is to use the allowance method in recording necessary adjustments. In 2021, market conditions have improved and on December 31, 2021, the inventory had a cost of P4,200,000 and net realizable value of 3,750,000. Compute for the amount of gain on reversal of inventory write-down on December 31, 2021.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 13RE: Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a...
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ABC Company experienced a decline in the value of its inventory in 2020 which resulted in a write-down from a cost of P2,400,000 to net realizable value of P1,650,000. The entity’s practice is to use the allowance method in recording necessary adjustments. In 2021, market conditions have improved and on December 31, 2021, the inventory had a cost of P4,200,000 and net realizable value of 3,750,000. Compute for the amount of gain on reversal of inventory write-down on December 31, 2021.
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