The Nittany Lion Company has 200 units of Product K on December 31, 2020, which...
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Accounting
The Nittany Lion Company has 200 units of Product K on December 31, 2020, which originally cost $30. The replacement cost of Product K is $15. Product K sells for $25, has associated selling costs of $3, and a normal profit margin would be $5. Nittany Lion Company treats any inventory write-downs as losses.
Question: Suppose Nittany Lion Company uses a perpetual LIFO inventory system. Which of the following would be reflected in a journal entry on December 31, 2020 to record the subsequent measurement of inventory?
Debit to loss for $2,600
Debit to loss for $1,600
Debit to loss for $3,000
Debit to loss for $1,000
Debit to loss for $3,400
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