10 7 points eBook E7-13 (Algo) Reporting Inventory at Lower of Cost or Market/Net Realizable Value [LO 7-4] Peterson Furniture Designs is preparing the annual financial statements dated December 31. Ending inventory information about the five major items stocked for regular sale follows: Required: 1-a. Complete the table column "Write-Down per Item" and then sum the final column. 1-b. Compute the amount of the total write-down when the LCM/NRV rule is applied to each item. 2. Prepare the journal entry Peterson Furniture Designs would record on December 31 to write down its inventory to LCM/NRV Complete this question by entering your answers in the tabs below. Print Req 1A Req 18 Req 2 Complete the table column "Write-Down per Item" and then sum the final column. Item Unit Cost (FIFO) NRV per Item Write-down per Item: Quantity on Hand Total Write- down Alligator Armoires $ 40 $ 35 55 Bear Bureaus 22 22 35 Cougar Credenzas 27 31 40 Dingo Cribs 28 28 25 Elephant Dressers 49 47 10 A Req 18 > 7 nts Book E7-13 (Algo) Reporting Inventory at Lower of Cost or Market/Net Realizable Value [LO 7-4] Peterson Furniture Designs is preparing the annual financial statements dated December 31. Ending inventory information about the five major items stocked for regular sale follows: Required: 1-a. Complete the table column "Write-Down per Item" and then sum the final column. 1-b. Compute the amount of the total write-down when the LCM/NRV rule is applied to each item. 2. Prepare the journal entry Peterson Furniture Designs would record on December 31 to write down its inventory to LCM/NRV. Complete this question by entering your answers in the tabs below. Print Req 1A Req 18 Req 2 Compute the amount of the total write-down when the LCM/NRV rule is applied to each item. Total amount of write-down Save & Exit Complete this question by entering your answers in the tabs below. 7 Req 1A Req 1B Req 2 10 points Prepare the journal entry Peterson Furniture Designs would record on December 31 to write down its inventory to LCM/NRV. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet eBook < Print 1 Record inventory write down to LCM/NRV. Note: Enter debits before credits. Date December 31 General Journal Debit Credit Record entry Clear entry View general journal E7-19 (Algo) (Supplement 7B) Analyzing and Interpreting the Impact of an Inventory Dallas Corporation prepared the following two income statements: Sales Revenue Cost of Goods Sold Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations First Quarter Second Quarter $ 19,000 $ 22,800 $ 3,800 $ 4,800 7,800 11,600 4,800 12,800 17,600 9,800 6,800 12,200 7,800 15,000 6,800 $ 8,200 5,800 $ 6,400 During the third quarter, the company's internal auditors discovered that the ending inventory for the first quarter should have been $5,500. The ending inventory for the second quarter was correct. Required: 1. What effect would the error have on total Income from Operations for the two quarters combined? 2. What effect would the error have on Income from Operations for each of the two quarters? 3. Prepare corrected income statements for each quarter. Ignore income taxes. Complete this question by entering your answers in the tabs below. Required 11 Required 2 Required 3 Prepare corrected income statements for each quarter. Ignore income taxes. Dallas Corporation Income Statement (Partial) 1. What effect would the error have on total Income from Operations for the two quarters combined? 2. What effect would the error have on Income from Operations for each of the two quarters? 3. Prepare corrected income statements for each quarter. Ignore income taxes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare corrected income statements for each quarter. Ignore income taxes. Dallas Corporation Income Statement (Partial) First Quarter Second Quarter < Required 2 0 0 0 0 Required 3>