Some of Lamar Scuba Center's merchandise is gathering dust. It is now December 31, 2009. The current
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Some of Lamar Scuba Center's merchandise is gathering dust. It is now December 31, 2009. The current replacement cost of Lamar's ending inventory is \(\$ 15,000\) below Lamar's cost of the goods, which was \(\$ 90,000\). Before any adjustments at the end of the period, the Cost of Goods Sold account has a balance of \(\$ 400,000\).
What action should Lamar take in this situation, if any? Give any journal entry required. At what amount should Lamar report Inventory on the balance sheet? At what amount should the company report Cost of Goods Sold on the income statement? Discuss the accounting principle or concept that is most relevant to this situation.
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In this situation Lamar Scuba Center should adjust its ending inventory to reflect its lower replace...View the full answer
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Kirti Kaushal
Having experience of more than 10 years is good enough to coach my students. Currently, I am working as an active supervisor of ACCA students. In my career, I helped students in financial accounting, management accounting, cost accounting, financial reporting, taxation, and audit. I also helped students publish their articles or papers in good journals. I also helped students with thesis and objective writing.
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