Question

Prepare journal entry: The $36,200 of Merchandise Inventory includes several classes of merchandise. One of these...

Prepare journal entry:

The $36,200 of Merchandise Inventory includes several classes of merchandise. One of these classes, with a cost of $12,000, has suffered a loss in market value such that its net realizable value is now estimated at $10,000.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Provision:

As per the Accounting Standard 2 "Inventory Valuation",Inventory while showing at the year end must be shown in the books of accounts at cost or Net realisable value which ever is lower.any loss araises due to fall in marketprice(NRV) ,then such loss should be wrote off to the profit and loss account

Journal entry as follows:

Profit and loss account Dr. ( 12000-10000) 2000

To Merchandise Inventory 2000

So that ultimately inventory is showed at cost or nrv which ever is lower

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Need a journal entry with a description ABC uses a periodic inventory system, and the ending...
Need a journal entry with a description ABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete physical inventory at year-end. A physical count was taken on December 31, 2016, and the inventory on-hand at that time totaled $100,000, which reflects historical cost. Record the adjusting entry for properly recognizing 2016 Cost of Goods Sold. Hint: This was the first year of operations, so beginning inventory balance is zero. Additionally, ABC...
The qestion is to prepare the journal entry using a perpetual inventory Prepare journals entries for...
The qestion is to prepare the journal entry using a perpetual inventory Prepare journals entries for the following, assuming the company uses a perpetual inventory method and records purchases at their net amounts. Note: You can use T-accounts which help you to find the answers (from the balance of each account). Use gross amount approach. June 1 Purchased merchandise from Harper Company for $1,000 with terms of 2/10, n/30 June 2 Returned $100 of the merchandise to the Harper Company....
Using a periodic inventory system, the buyer’s journal entry to record the freight costs includes a:...
Using a periodic inventory system, the buyer’s journal entry to record the freight costs includes a: Select one: A. Debit to Cost of Goods Sold B. Debit to Freight In C. Debit to Inventory D. Debit to Purchases
6. Codify Lighting has the following groups of inventory and net realizable value for its light...
6. Codify Lighting has the following groups of inventory and net realizable value for its light fixtures :                                                 Cost                                         NRV Ceiling Lights                         $23,500                                 $18,100 Chandeliers                             17,500                                   15,100 Table Lamps                           19,300                                   21,800 Floor Lamps                            16,000                                   19,400 Desk Lamps                                8,700                                   6,200 Total Inventory                       $85,000                                 $80,600 Instructions (a)        Determine the lower of cost and net realizable value of the ending inventory for Codify Lighting. (b)        Prepare the journal entry required, if any, to record the adjustments from cost...
At the end of the year, inventory has a cost of $200,000, net realizable value of...
At the end of the year, inventory has a cost of $200,000, net realizable value of $195,000, replacement cost of $160,000, and normal profit margin of $25,000. Assuming normal business circumstances, prepare the year-end adjusting entry, if any, for inventory using the lower of cost or market approach. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Grouper Corp. lost most of its inventory in a fire in December, just before the year-end...
Grouper Corp. lost most of its inventory in a fire in December, just before the year-end physical inventory was taken. The corporation’s books disclosed the following: Beginning inventory $ 370,000 Sales $ 1,391,800 Purchases for the year 960,000 Sales returns 50,000 Purchase returns 82,000 Gross margin on sales 47 % Merchandise with a selling price of $40,000 remained undamaged after the fire. Damaged merchandise with an original selling price of $26,000 had a net realizable value of $9,600. Calculate the...
Journalize the following activity. Remember a complete journal entry includes a date, accounts, and amounts. Be...
Journalize the following activity. Remember a complete journal entry includes a date, accounts, and amounts. Be sure to clearly indicate whether amounts are debit or credit entries. On October 3rd, Company A sold on account $22,000 of merchandise that had a cost of $12,000. Terms offered were 2/10, n/30. On October 18th, Company A received payment for the balance owed from the transaction on October 3rd.
Prepare the necessary journal entries. ABC Corp sold merchandise on its store credit card for $4,000...
Prepare the necessary journal entries. ABC Corp sold merchandise on its store credit card for $4,000 The cost of the merchandise sold was $2,400 The company uses a perpetual inventory system. ABC Corp, recorded interest on past due store credit card accounts of $100 A restaurant is the site for a large company party.   The bill totals $5,200 and is charged by the company on a Mastercard. Assume a 4% service fee is charged by Mastercard. Record the journal entry...
Calabogie Camera Shop Ltd. reports the following cost and net realizable value information for its inventory...
Calabogie Camera Shop Ltd. reports the following cost and net realizable value information for its inventory at December 31: Cameras: Units Unit Cost Unit NRV Sony 4 $175 $160 Canon 8 150 152 Light Maters: Gossen 12 135 139 Sekonic 10 115 110 a) Determine the lower of cost and net realizable value of the ending inventory b) Prepare the adjusting journal entry required, If any, to record the lower of cost and net realizable value of the inventory assuming...
Required: 1 Prepare the journal entries to record these transactions. (If no entry is required for...
Required: 1 Prepare the journal entries to record these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) 1a. Record the sales revenue of $220 for cash and $120 on account and record the cost of goods sold of $133 using one journal entry. 1b. Record the salaries and wages expense of $90. 2. Calculate the amount that should be reported as net cash flow from operating activities. 3. Calculate...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT