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Meredith Grey Co. began operations in 2020 and determined its inventory at cost and at LCNRV at December 31, 2020 and 2021. This information is

Meredith Grey Co. began operations in 2020 and determined its inventory at cost and at LCNRV at December 31, 2020 and 2021. This information is presented below.

Cost

Net Realizable Value

12/31/2020

$300,000

$280,000

12/31/2021

$400,000

$395,000

  1. What entry will Meredith make on 12/31/2021, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods sold method?

Cost of Goods Sold 5,000

Allowance to Reduce Inventory to NRV 5,000

Cost of Goods Sold 15,000

Allowance to Reduce Inventory to NRV 15,000

Allowance to Reduce Inventory to NRV 15,000

Cost of Goods Sold 15,000

Allowance to Reduce Inventory to NRV 5,000

Cost of Goods Sold 5,000

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