Bonita Inc. uses a perpetual inventory system. At January 1, 2017, inventory was
ID: 2430677 • Letter: B
Question
Bonita Inc. uses a perpetual inventory system. At January 1, 2017, inventory was $215,179,900 at both cost and realizable value. At December 31, 2017, the inventory was $289,165,500 at cost and $268,314,200 at realizable value.
Prepare the necessary December 31 entry under (a) the cost-of-goods-sold method (b) Loss 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.)
No.
Account Titles and Explanation
Debit
Credit
No.
Account Titles and Explanation
Debit
Credit
(a) (b)Explanation / Answer
No. Account Titles and Explanation Debit Credit (a) Cost of Goods Sold($289,165,500 – $268,314,200) $20,851,300 Allowance to Reduce Inventory to Market $20,851,300 (b) Loss Due to Market Decline of Inventory $20,851,300 Allowance to Reduce Inventory to Market $20,851,300