Because of a nationwide recession, Liquidation Universe, Inc.s merchandise inventory is gathering dust. It is now November

Question:

Because of a nationwide recession, Liquidation Universe, Inc.’s merchandise inventory is gathering dust. It is now November 30, 2018, and the $162,750 that Liquidation Universe, Inc., paid for its ending inventory is $3,125 higher than the current replacement cost. Before any adjustments at the end of the period, Liquidation Universe, Inc.’s Cost of Goods Sold account has a balance of $671,400. Liquidation Universe, Inc., uses the lower of cost or market to value its ending inventory.

Requirements

1. What amount should Liquidation Universe, Inc., report for inventory on the balance sheet?

2. What amount should Liquidation Universe, 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 =... Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....

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