Because of a nationwide recession, Computer World, Inc.s merchandise inventory is gathering dust. It is now October

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Because of a nationwide recession, Computer World, Inc.’s merchandise inventory is gathering dust. It is now October 31, 2018, and the $66,800 that Computer World, Inc., paid for its ending inventory is $2,300 higher than current replacement cost. Before any adjustments at the end of the period, Computer World, Inc.’s Cost of Goods Sold account has a balance of $587,400. Computer World Inc., uses the lower of cost or market to value its ending inventory.


Requirements

1. What amount should Computer World Inc., report for inventory on the balance sheet?

2. What amount should Computer World, Inc., report for cost of goods sold?

3. Journalize any required entries.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
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Financial Accounting

ISBN: 978-0134727790

5th edition

Authors: Robert Kemp, Jeffrey Waybright

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