Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sweet Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is available from the companys inventory records as of December

Sweet Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is available from the companys inventory records as of December 31, 2017.

Item

Quantity

Unit Cost

Replacement Cost/Unit

Estimated Selling Price/Unit

Completion & Disposal Cost/Unit

Normal Profit Margin/Unit

A 1,800 $9.15 $10.25 $12.81 $1.83 $2.20
B 1,500 10.00 9.64 11.47 1.10 1.46
C 1,700 6.83 6.59 8.78 1.40 0.73
D 1,700 4.64 5.12 7.69 0.98 1.83
E 2,100 7.81 7.69 8.17 0.85 1.22

Greg Forda is an accounting clerk in the accounting department of Sweet Co., and he cannot understand why the market value keeps changing from replacement cost to net realizable value to something that he cannot even figure out. Greg is very confused, and he is the one who records inventory purchases and calculates ending inventory. You are the manager of the department and an accountant.

Show the journal entry he will need to make in order to write down the ending inventory from cost to market

1.

Cost of Goods sold Method: 2.
The Loss method:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

From Fish Hook To Audit Tool An Autobiography

Authors: Aftab Alam Khan

1st Edition

1099497515, 978-1099497513

More Books

Students also viewed these Accounting questions

Question

Explain the various methods of job evaluation

Answered: 1 week ago

Question

Differentiate Personnel Management and Human Resource Management

Answered: 1 week ago

Question

Describe the functions of Human resource management

Answered: 1 week ago