List of Accounts

• Accounts Payable
• Adjustment to Record Inventory at Cost
• Allowance to Reduce Inventory to Market
• Allowance to Reduce Inventory to NRV
• Biological Assets - Shearing Sheep
• Cash
• Cost of Goods Sold
• Estimated Liability on Purchase Commitments
• Income Summary
• Inventory
• Inventory Over and Short
• Loss Due to Decline of Inventory to NRV
• Loss Due to Market Decline of Inventory
• Loss on Fire
• Notes Payable
• Purchases
• Raw Materials
• Recovery of Loss Due to Market Decline of Inventory
• Recovery of Loss Due to Impairment
• Recovery of Loss Inventory
• Salaries and Wages Expense
• Sales Revenue
• Unrealized Holding Gain or Loss - Equity
• Unrealized Holding Gain or Loss - Income
• Wool Inventory

At 12/31/20, the end of Blossom Company's first year of business, inventory was $6,800 and $5,400 at cost and at market, respectively. Following is data relative to the 12/31/21 inventory of Jenner: Item Original Cost Per Unit $0.60 Replacement Cost $0.45 A B 0.40 0.35 0.65 0.70 D 0.60 0.50 E 0.85 0.80 Selling price is $1.00/unit for all items. Disposal costs amount to 10% of selling price and a "normal" profit is 20% of selling price. There are 1,600 units of each item in the 12/31/21 inventory. (a) Prepare the entry at 12/31/20 necessary to implement the lower-of-cost-or-market procedure assuming Blossom uses a contra account for its balance sheet. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 12/31/20 List of Accounts Save for Later Attempts: 0 of 1 used Submit Answer (b) Complete the last three columns in the 12/31/21 schedule below based upon the lower-of-cost-or-market rules. Original Cost Per Unit Replacement Cost Net Realizable Value Net Realizable Value Less Normal Profit Item $0.60 $0.45 $ $ $ B 0.40 0.35 0.65 0.70 D 0.60 0.50 E 0.85 0.80 List of Accounts Save for Later Attempts: 0 of 1 used Submit Answer (b) Complete the last three columns in the 12/31/21 schedule below based upon the lower-of-cost-or-market rules. st Replacement Cost Net Realizable Value Net Realizable Value Less Normal Profit Appropriate Inventory Value $0.60 $0.45 $ $ 0.40 0.35 0.65 0.70 0.60 0.50 0.85 0.80 $ List of Accounts Save for Later Attempts: 0 of 1 used Submit Answer (c) Prepare the entries necessary at 12/31/21 based on the data above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 12/31/21 (To record cost of goods sold) 12/31/21 (To record profit/ loss) List of Accounts Save for Later Attempts: 0 of 1 used Submit Answer ) (d) How are inventory losses disclosed on the income statement? Inventory losses can be disclosed separately below or they can be shown as part of List of Accounts gross profit in operating expenses Save for Later gross profit in selling expenses empts: 0 of 1 used Submit Answer gross profit in administration expenses (d) How are inventory losses disclosed on the income statement? ed separately below or they can be shown as part of List of Accounts cost of goods available for sale Save for Later Atter cost of goods manufactured cost of goods sold