Question
On December 31, the Materials account for the Moon Manufacturing Company has a balance of P296,369. The company has been using the lower of cost
On December 31, the Materials account for the Moon Manufacturing Company has a balance of P296,369. The company has been using the lower of cost or net realizable value method for several years. The Allowance for Inventory Write Down account has a balance of P8,930. The net realizable value of the materials on December 31 is P291,250.
On December 31, what is the entry to adjust the value of the materials at the lower of cost or net realizable value? ( use the second approach )
a. Allowance for inventory write down 3,811
Recovery from inventory write down 3,811
b. Loss on inventory write down 5,119
Allowance from inventory write down 5,119
c. Allowance for inventory write down 3,821
Inventory 3,821
d. Allowance for inventory write down 5,119
Recovery from inventory write down 5,119
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