Given the following information for the Raquel Company who uses the periodic inventory system: Date Cost Market December 31, 2018 $500 $500 December 31, 2019 700 650 December 31, 2020 800 730 If the allowance method of recording lower of cost or NRV is in use, which December 31, 2020, journal entry is correct? a. Loss Due to Write-Down on Inventory 70 Allowance to Reduce Inventory to NRV 70 b. Loss Due to Write-Down of Inventory 20 Allowance to Reduce Inventory to NRV 20 c. Allowance to Reduce Inventory to NRV 800 Income Summary 800 d. Inventory 730 Income Summary 730
Given the following information for the Raquel Company who uses the periodic inventory system: Date Cost Market December 31, 2018 $500 $500 December 31, 2019 700 650 December 31, 2020 800 730 If the allowance method of recording lower of cost or NRV is in use, which December 31, 2020, journal entry is correct? a. Loss Due to Write-Down on Inventory 70 Allowance to Reduce Inventory to NRV 70 b. Loss Due to Write-Down of Inventory 20 Allowance to Reduce Inventory to NRV 20 c. Allowance to Reduce Inventory to NRV 800 Income Summary 800 d. Inventory 730 Income Summary 730
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 6E: Inventory Write-Down The inventories of Berry Company for the years 2019 and 2020 are as follows:...
Related questions
Topic Video
Question
Given the following information for the Raquel Company who uses the periodic inventory system:
If the allowance method of recording lower of cost or NRV is in use, which December 31, 2020,journal entry is correct?
| Date | Cost | Market |
| December 31, 2018 | $500 | $500 |
| December 31, 2019 | 700 | 650 |
| December 31, 2020 | 800 | 730 |
If the allowance method of recording lower of cost or NRV is in use, which December 31, 2020,
a.
| Loss Due to Write-Down on Inventory | 70 | |||
| Allowance to Reduce Inventory to NRV | 70 |
b.
| Loss Due to Write-Down of Inventory | 20 | |||
| Allowance to Reduce Inventory to NRV | 20 |
c.
| Allowance to Reduce Inventory to NRV | 800 | |||
| Income Summary | 800 |
d.
| Inventory | 730 | |||
| Income Summary | 730 |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College