On April 1, a company purchased two units of inventory, A and B. The cost of unit A was $640, and the cost of unit B was $565. On April 30, the company had not sold the inventory. Thenet realizable value of unit A was now $660 while the net realizable value of unit B was $485. The adjustment associated with the lower of cost and net realizable value on April 30 willbe:1.Cost of Goods Sold6060Inventory260InventoryCost of Goods Sold60803.Cost of Goods Sold80Inventory4.Inventory80Cost of Goods Sold80Multiple ChoiceOption 3оOption 4Option 2Option 1

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Asked Sep 28, 2019

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On April 1, a company purchased two units of inventory, A and B. The cost of unit A was $640, and the cost of unit B was $565. On April 30, the company had not sold the inventory. The
net realizable value of unit A was now $660 while the net realizable value of unit B was $485. The adjustment associated with the lower of cost and net realizable value on April 30 will
be:
1.
Cost of Goods Sold
60
60
Inventory
2
60
Inventory
Cost of Goods Sold
60
80
3.
Cost of Goods Sold
80
Inventory
4.Inventory
80
Cost of Goods Sold
80
Multiple Choice
Option 3
о
Option 4
Option 2
Option 1
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On April 1, a company purchased two units of inventory, A and B. The cost of unit A was $640, and the cost of unit B was $565. On April 30, the company had not sold the inventory. The net realizable value of unit A was now $660 while the net realizable value of unit B was $485. The adjustment associated with the lower of cost and net realizable value on April 30 will be: 1. Cost of Goods Sold 60 60 Inventory 2 60 Inventory Cost of Goods Sold 60 80 3. Cost of Goods Sold 80 Inventory 4.Inventory 80 Cost of Goods Sold 80 Multiple Choice Option 3 о Option 4 Option 2 Option 1

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Step 1
Aidjusting entry for inuntory is parad
period and adjustments ae made
inuanteny
at the end
in the Values
a
cost of goods sold (p4s) and
campany Ahould ecord it inuuntory
market Value ,whicheuer is lauur. This
as louer of market value and cast
Ais per GAAP's,
a
at the cast oY
is knoun
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Aidjusting entry for inuntory is parad period and adjustments ae made inuanteny at the end in the Values a cost of goods sold (p4s) and campany Ahould ecord it inuuntory market Value ,whicheuer is lauur. This as louer of market value and cast Ais per GAAP's, a at the cast oY is knoun

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Step 2
Calculation for adusting entry wuill be dene as
follouy
Invertory Cast
lauey of Lat or
nmasket value
$640
Marker Value
$640
$565
B
$485
$485
Value f inuuntory B wil be ruducd to
Net sualizable valuu (Manket value) and adjurting
enty will be papasad for inuntory B a its
marker Valu is leu than its Cast. Amount for
asjusting entry wibe 80 ( 565 - 485)
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Calculation for adusting entry wuill be dene as follouy Invertory Cast lauey of Lat or nmasket value $640 Marker Value $640 $565 B $485 $485 Value f inuuntory B wil be ruducd to Net sualizable valuu (Manket value) and adjurting enty will be papasad for inuntory B a its marker Valu is leu than its Cast. Amount for asjusting entry wibe 80 ( 565 - 485)

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