Question

Concord Company began operations in 2020 and determined its ending inventory at cost and at LCNRV at December 31, 2020, and December 31, 2021. This information is presented below. Net Realizable Value Cost $322,170 $299,520 12/31/20 12/31/21 409,250 390,440 (a) Prepare the journal entries required at December 31, 2020, and December 31, 2021, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods-sold 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.) Account Titles and Explanation Credit Date Debit 12/31/20 12/31/21 (b) Prepare journal entries required at December 31, 2020, and December 31, 2021, assuming inventory is recorded at LCNRV and a perpetual system using the 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.) Account Titles and Explanation Debit Date Credit 12/31/20

Answer 1

- - $22650 3840 $ 3840 Date Acounktiebherb Explanation Debel credit 12/31/20) Cost of goods sold 1$ 22650 Allowance to Reduce Inventorey to NRV 12/31/21 Allowance to Reduce inventory to NRV costs of goods sold - $3840 Explanations : 12/31/20 ; cost of goods sold o cost of inventory - LCNRV $ 322,170 - $ 299520 - $ 22650 12/31/a) : costof inventory - LCNRV $409250 –8 390,440 = $18810 Allowance to Reduce E $22650 - $18810 e'wendony fo NRV = s ? 3840

Date Accounk.clles afoplanation. Debit Credit 12/31/20 hoss due to Decline of $ 32650 foventony to NRV Allowance fo Redvel - Invenfory do NRV 8.22650 12/31/21 Allowance to Reduce | $ 3840 Inventory to NRV Recovery of Armendory). 3840 Explanations : Cost of inventory.. = { 332170 Less: LCNRV $ 899520 Allowance amount needed aan : R '22650 o reduce inventory (A) * cost of inventory s. 409250 less: LENRV of 390 440 Allowance amerund neededz 18840 to bredere inventory (B) recortes de $ 2840 © Which of the fewo methods above proovides The highen had income in each year . | Answer: Both methods provide the] : I same mel income