Question

Exercise 9-4 Partially correct answer. Your answer is partially correct. Try again. Bridgeport Company began operations in 2017 and determined its ending inventory at cost and at LCNRV at December 31, 2017, and December 31, 2018. This information is presented below. Cost Net Realizable Value 12/31/17 $340,890 $315,290 12/31/18 439,200 417,500 (a) Prepare the journal entries required at December 31, 2017, and December 31, 2018, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods-sold method. (Credit account titles are automatically indented when 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.) (b) Prepare journal entries required at December 31, 2017, and December 31, 2018, assuming inventory is recorded at cost and a perpetual system using the loss method. (Use Recovery of Loss Inventory account.) (Credit account titles are automatically indented when 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.)

Answer 1

a.

Date	Account Titles	Debit	Credit
12/31/17	Cost of goods sold ($340,890 - $315,290)	$25,600
	Allowance for reduction in inventory to NRV		$25,600
12/31/18	Allowance for reduction in inventory to NRV	$3,900
	Cost of goods sold [$25,600 - (439,200 - 417,500)]		$3,900

b.

12/31/17	Loss because of decline in inventory to NRV	$25,600
	Allowance for reduction in inventory to NRV		$25,600
12/31/18	Allowance for reduction in inventory to NRV	$3,900
	Inventory Loss		$3,900