Question 4 of 10 - / 1 (a) Prepare the journal entries required at December 31, 2017 and December 31, 2018, assuming that the inventory is recorded at LCNRV, and that a perpetual inventory system. Use the cost-of-goods-sold method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter Ofor the amounts.) Date Account Titles and Explanation Debit Credit 12/31/17 Cost of Goods Sold Allowance to Reduce Inventory to NRV 12/31/18 Allowance to Reduce Inventory to NRV Cost of Goods Sold (b) Prepare journal entries required at December 31, 2017, and December 31, 2018, assuming that the inventory is recorded at LCNRV and a perpetual system. Use the loss method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit 12/31/17 Loss Due to Decline of Inventory to NRV Allowance to Reduce Inventory to NRV 12/31/18 Allowance to Reduce Inventory to NRV Recovery of Inventory Loss (c) Which of the two methods above provides the higher net income in each year? Both methods have the same effect Question 4 of 10 > View Policies Current Attempt in Progress Waterway Company began operations in 2017 and determined its ending inventory at cost and at LCNRV at December 31, 2017 and December 31, 2018. This information is presented below. Cost Net Realizable Value 12/31/17 $867,000 $822,200 12/31/18 1.035,000 999,300 (a) Prepare the journal entries required at December 31, 2017 and December 31, 2018, assuming that the inventory is recorded at LCNRV, and that a perpetual inventory system. Use the cost-of-goods-sold method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry for the account titles and enter for the amounts.) Date Debit Credit Account Titles and Explanation Cost of Goods Sold 12/31/17 Allowance to Reduce Inventory to NRV 12/31/18 Allowance to Reduce Inventory to NRV Cost of Goods Sold (b) Prepare journal entries required at December 31, 2017, and December 31, 2018, assuming that the inventory is recorded at LCNRV and a perpetual system. Use the loss method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter for the amounts.) Debit Credit Date Account Titles and Explanation 12/31/17 Loss Due to Decline of Inventory to NRV Allowance to Reduce Inventory to NRV 12/31/18 Allowance to Reduce Inventory to NRV Recovery of Inventory Loss
