P8-9 Milford Company determined its ending inventory at cost and at lower of cost and net...

50.1K

Verified Solution

Question

Accounting

P8-9 Milford Company determined its ending inventory at cost andat lower of cost and net realizable value at December 31, 2015,2016, and 2017, as follows:
Cost Lower of Cost and Net Realizable Value
Dec. 31, 2015 $60,000 $60,000
Dec. 31, 2016 79,000 74,500
Dec. 31, 2017 78,800 69,000
Instructions (a) Prepare the journal entries that are requiredat December 31, 2016 and 2017, assuming that a periodic inventorysystem and the direct method of adjusting to NRV are used. (b)Prepare the journal entries that are required at December 31, 2016and 2017, assuming that a periodic inventory system is used, withinventory recorded at cost and reduced to NRV through the use of anallowance account.

Answer & Explanation Solved by verified expert

4.1 Ratings (755 Votes)

Solution a Journal Entries Date Particulars Debit Credit 31 December 2016 Income Summary Dr 60000 To Inventory 60000 To close Beginning Inventory 31 December 2016 Inventory Dr 79000 To Income summary 79000 To Close Ending Inventory 31 December 2016 See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member