Question

S&C Inc. has the following LIFO perpetual inventory​ records:

Date	Purchases	Cost of Goods Sold	Inventory on Hand
December 1			​$3,000
December 7	​$900		​$3,900
December 18		​$900	​$3,000
December 31	​$200		​$3,200

The current replacement cost of the ending inventory is​ $2,400. To apply the

lowerminus−ofminus−costminus−orminus−market

​rule, the journal entry would​ be:

A.

debit Cost of Goods Sold​ $800, credit Inventory​ $800

B.

debit Inventory​ $900, credit Cost of Goods Sold​ $900

C.

debit Inventory​ $800, credit Cost of Goods Sold​ $800

D.

debit Cost of Goods Sold​ $900, credit Inventory​ $900

Answer 1

Please find below the answer and please give thumbs up
Statementshowing Computations
Paticulars	Amount
Cost of ending inventory	3,200.00
Replacement Cost or market value	2,400.00
Lower of cost or market value	2,400.00
Thus inventory needs to be reduced by 800 (3200 - 2400)
A. debit Cost of Goods Sold​ $800, credit Inventory​ $800