Cullumber Corporation had the following items in inventory as at December 31, 2020: Item No.   Quantity   Unit Cost   NRV   A1   140     $3.00     $3.10     B4   120     1.50     0.90     C2   190     9.20     10.40     D3   130     6.60     6.10   Assume that Cullumber uses a periodic inventory system, and that none of the inventory items can be grouped together for accounting purposes. The opening inventory on January 1, 2020, was $3,200 in total.     Prepare the year-end adjusting entries required to adjust to the lower of cost or net realizable value using the direct method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Direct Method: Date Account Titles and Explanation Debit Credit December 31, 2020                 (To transfer out beginning inventory balance)     December 31, 2020                 (To record ending inventory at LC and NRV)       List of Accounts                     Prepare the year-end adjusting entries required to adjust to the lower of cost or net realizable value using the indirect method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Indirect Method: Date Account Titles and Explanation Debit Credit December 31, 2020                 (To transfer out beginning inventory balance)     December 31, 2020                 (To record ending inventory at cost)     December 31, 2020                 (To write-down inventory to lower NRV)       List of Accounts

Q: D Company began operations in 2018 and determined its ending inventory at cost and at a LCNRV at…

A: Answer 1

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Q: Crane Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items.…

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A: Weighted average method is a method of inventory valuation in which weighted average cost of…

Q: Sheridan Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items.…

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Q: FRUITS Company wants to estimate its ending inventory balance by applying the retail inventory…

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Q: Gato Inc. had the following inventory situations to consider at January 31, its…

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A: Inventory is one of the important current asset being held by the business. It includes raw…

Q: At December 31, 2020, the following information was available from Sunland Co.'s accounting records:…

A: Ending inventory at cost = Inventory value * Cost to retail ratio

Q: Skysong Inc. uses a perpetual inventory system. At January 1, 2020, inventory was $213,418,700 at…

A: Allowance to Reduce Inventory to NRV = inventory  at cost - Inventory at realizable value =…

Q: Riegel Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items.…

A: As per LCNRV rule, inventory has to be valued at Lower of Cost or Net Realisable Value Net…

Q: Cullumber Corporation had the following items in inventory as at December 31, 2020: Item No.…

A: LCNRV refers to the method where the carrying value of the inventory is determined by comparing the…

Q: Naylor, Inc. uses a perpetual inventory system. It records its inventory at lower-of-cost-or-net…

A: Lower of Cost or Net Realizable Value (NRV) Method: This is a method of recording ending inventory…

Q: The inventory records of Kuffel Co. reflected the following information for the year ended December…

A: Under the periodic inventory system, the cost of goods is calculated at the end of the period, where…

Q: 2) Golden Products, Inc. adopted the dollar-value LIFO method of computing inventory on January 1,…

A: Solution: Computation of inventory at base year prices and change from prior year - Golden…

Q: Oriole Corporation had the following items in inventory as at December 31, 2020: Item No.…

A: Direct Method : In Direct method the business will charge the inventory write-off to COGS account.…

Q: Malone Company determined its ending inventory at cost and at LCNRV at December31, 2019, December…

A: In case of perpetual inventory system, inventory is constantly updated with changes in value. While…

Q: The inventory records of Kuffel Co. reflected the following information for the year ended December…

A: Periodic Inventory system is a system of maintaining inventories at periodic level. Whereas in…

Q: 17. On January 2020, Roel Corp. Has th following inventory purchases. January 2 5.750 7 5,100 15…

A: LIFO is last in first out method of inventory valuation which says that inventory which is purchased…

Q: Crane Corporation began operations on December 1, 2019. The only inventory transaction in 2019 was…

A: Solution: Cost of goods available for sale = (110*$21) + (310*$25 + 310*$26 + 210*$29 + 110*$32) =…

Q: Explain the following : 1. RAAS Company uses a periodic inventory system. Details for the inventory…

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Q: The following data represent the beginning inventory and, in order of occurrence, the purchases and…

A: 1. LIFO Method - Under LIFO Method, Inventory purchased last is sold first.   2. Periodic Inventory…

Q: Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory…

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Q: Mercury Company has only one Inventory pool. On December 31, 2018, Mercury adopted the dollar-value…

A: Computation of Year End Cost Index is as follows:

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A: Under lower of cost or NRV method, the inventory at the end of the year has to be reported at cost…

Q: The inventory records of Kuffel Co. reflected the following information for the year ended December…

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Q: At December 31, 2020, the following information was available from HIBISCUS Company's accounting…

A: Inventory Valuation using average method: The purpose using the inventory valuation in retail method…

Q: Metlock Company began operations in 2020 and determined its ending inventory at cost and at LCNRV at…

A: Introduction: Journal: Recording of a business transactions in a chronological order. First step in…

Q: Using the LCNRV rule, determine the proper per-unit value for balance sheet reporting purposes for…

A: Working Note: Computation of Net Realizable value:- Item selling Price Estimated  selling  exp.…

Q: Tatum Company has four products in its inventory. Information about the December 31, 2021, inventory…

A: Carrying Value of Inventory: Carrying value of inventory is the absolute of all costs connected with…

Q: 17. On January 2020, Roel Corp. Has the following inventory purchases. January Units Amount 2 5,750…

A: Date Units Amount January     2 5750 P7500 7 5100 5850 15 7600 6300 25 6600 4950 Total…

Q: Showtime Company's ending inventory at December 31, 2020, includes the following items: Units on Net…

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Q: The inventory records of Kuffel Co. reflected the following information for the year ended December…

A: The inventory can be valued using various methods as LIFO, FIFO and average method. FIFO stands for…

Q: Cullumber Corporation had the following items in inventory as at December 31, 2020: Item No.…

A: The lower of cost and market value needs to be computed for each item of the inventry

Q: Prepare the journal entries required at December 31, 2020, and December 31, 2021, assuming inventory…

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Q: Tatum Company has four products In Its Inventory. Informetion about the December 31, 2018, Inventory…

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A: Inventory of the business will always be reported according to rule of lower of cost or net…

Q: lue Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The…

A: Inventory must be valued at the lesser of its laid-down cost and the price for which it can likely…

Q: Encantadia Company had the following inventories on January 1, 2020: Inventory Cost Amihan 725,200…

A:

Q: Riverside Inc. began business on January 1, 2020. The firm made the following inventory purchases…

A: FIFO and LIFO are the assumptions used to calculate the amount of cost of goods sold and ending…

Q: Malone Company determined its ending inventory at cost and at LCNRV at December 31, 2020, December…

A: In case of perpetual inventory system, inventory is constantly updated with changes in value. While…

Q: Crane Corporation began operations on December 1, 2019. The only inventory transaction in 2019 was…

A: Formula: Price Index=Ending Inventory for the Period at Current CostEnding Inventory for the Period…

Q: Bramble Inc. uses a perpetual inventory system. At January 1, 2020, inventory was $216,170,800 at…

A: Perpetual inventory system, also regarded as continuous inventory that states the inventory system,…

Q: Tamarisk Inc. uses a perpetual inventory system. At January 1, 2020, inventory was $211,116,400 at…

A: Allowance to reduce inventory to market =   Ending inventory at cost - Ending inventory at…

Q: During January 2019, Marta Company, which maintains a perpetual inventory system, recorded the…

A: Cost of sales =Beginning inventory +Purchases -Ending inventory

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.