Please Help! WILL RATE! WILL RATE! cise 143 At 12/31/17, the end of Jenner Compa
ID: 2568107 • Letter: P
Question
Please Help! WILL RATE!
WILL RATE! cise 143 At 12/31/17, the end of Jenner Company's first year of business, inventory was $6,100 and $5,100 at cost and at market, respectively. Following is data relative to the 12/31/18 inventory of Jenner: tem Original Cost Replacement Per Unit $.65 .45 .70 .75 90 Cost $.45 .40 .75 .65 .85 Selling price is $1.00/unit for all items. Disposal costs amount to 10% of selling price and a "normal" profit is 30% of selling price. There are 1,500 units of each item in the 12/31/18 inventory Instructions: Prepare the entry at 12/31/17 neccessary to implement the lower-of-cost or designated market procedure assuming Jenner uses a contra account for its balance sheet.Explanation / Answer
Prepare the entry at 12/31/14 necessary to implement the lower-of-cost-or-market procedure assuming Jenner uses a contra account for its balance sheet.
Particulars
Debit
Credit
Loss due to Market Value Decline of Inventory (6100 - 5100)
1000
Allowance to reduce Inventory to Market Value
1000
Being adjustment entry for Implementing Lower of Cost or Market
Prepare the entry at 12/31/14 necessary to implement the lower-of-cost-or-market procedure assuming Jenner uses a contra account for its balance sheet.
Particulars
Debit
Credit
Loss due to Market Value Decline of Inventory (6100 - 5100)
1000
Allowance to reduce Inventory to Market Value
1000
Being adjustment entry for Implementing Lower of Cost or Market