Question
On January 1, 2022, LBE bought inventory. The purchase was financed through an interest-free vendor take-back loan, with a promise to repay $200,000 in two
On January 1, 2022, LBE bought inventory. The purchase was financed through an interest-free vendor take-back loan, with a promise to repay $200,000 in two years.
David recorded the loan on the balance sheet at $200,000. As at December 31, 2022, the inventory's net realizable value was $100,000.
Required:
1) How to record the transactions? What are the considerations of LBE?
Step by Step Solution
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Since the inventorys net realizable value at December 31 2022 was less than the amount owed on the v...
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Intermediate Accounting Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
12th Canadian Edition
1119497043, 978-1119497042
