PROBLEM1. Wharf Company uses a perpetual inventory system and values its inventory at lower of cost or market.Its accounting records indicate the following information relating to inventory:InventoryCost$ 60,000DateJanuary 1, 2019December 31, 2019December 31, 2020Market$ 60,000102,00088,000115,000109,000Required:Prepare the required journal entries at December 31, 2019, and December 31, 2020, to record theinventory at lower of cost or market using the following methods:a. Direct methodb. Allowance method

Name: PROBLEM1. Wharf Company uses a perpetual inventory system and values
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Description: PROBLEM1. Wharf Company uses a perpetual inventory system and values its inventory at lower of cost or market.Its accounting records indicate the following information relating to inventory:InventoryCost$ 60,000DateJanuary 1, 2019December 31, 2019De

Journal entries are prepared to record the financial and non-financial transactions of the business.

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PROBLEM 1. Wharf Company uses a perpetual inventory system and values its inventory at lower of cost or market. Its accounting records indicate the following information relating to inventory: Date January 1, 2019 December 31, 2019 December 31, 2020 Inventory Cost $ 60,000 102,000 Market $ 60,000 88,000 115,000 109,000 Required: Prepare the required journal entries at December 31, 2019, and December 31, 2020, to record the inventory at lower of cost or market using the following methods: a. Direct method b. Allowance method

PROBLEM 1. Wharf Company uses a perpetual inventory system and values its inventory at lower of cost or market. Its accounting records indicate the following information relating to inventory: Date January 1, 2019 December 31, 2019 December 31, 2020 Inventory Cost $ 60,000 102,000 Market $ 60,000 88,000 115,000 109,000 Required: Prepare the required journal entries at December 31, 2019, and December 31, 2020, to record the inventory at lower of cost or market using the following methods: a. Direct method b. Allowance method

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:...

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Perpetual and Periodic Inventory Systems Below is a list of inventory systems options. a. Perpetual inventory system b. Periodic inventory system c. Both perpetual and periodic inventory systems Required: Match each option with one of the following: 1. Only revenue is recorded as sales are made during the period; the cost of goods sold is recorded at the end of the period. 2. Cost of goods sold is determined as each sale is made. 3. Inventory purchases are recorded in an inventory account. 4. Inventory purchases are recorded in a purchases account. 5. Cost of goods sold is determined only at the end of the period by subtracting the cost of ending inventory from the cost of goods available for sale. 6. Both revenue and cost of goods sold are recorded during the period as sales are made. 7. The inventory is verified by a physical count.
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 direct 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.
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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(Appendix 8.1) Inventory Write-Down The inventories of Berry Company for the years 2019 and 2020 are as follows: Berry uses the periodic inventory method and the FIFO inventory cost flow assumption. Required: 1. Assume the inventory that existed at the end of 2019 was sold in 2020. Prepare the necessary journal entries at the end of each year to record the correct inventory valuation if Berry uses the: a. direct method b. allowance method 2. Next Level Refer to your answer for E8-6. How does the use of a periodic or perpetual inventory system affect the valuation of inventory?
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Inventory Write-Down The inventories of Berry Company for the years 2019 and 2020 are as follows: Berry uses a perpetual inventory system and the FIFO inventory cost flow assumption. Required: 1. Assume the inventory that existed at the end of 2019 was sold in 2020. Prepare the necessary journal entries at the end of each year to record the correct inventory valuation if Berry uses the: a. direct method b. allowance method 2. Next Level Explain any differences in inventory valuation and income between the two methods.
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