Question
The controller of Utah Corp. has provided you with the following information relating to its inventory: Date Cost Lower of cost and NRV Dec 31/22
The controller of Utah Corp. has provided you with the following information relating to its
inventory:
Date Cost Lower of cost and NRV
Dec 31/22 $457,000 $410,000
Dec 31/23 $615,000 $555,000
Utah uses the periodic inventory system, and records its inventory at cost. An allowance account is adjusted at the end of each year to adjust the value of the inventory to the lower of cost and NRV.
Instructions
Prepare the journal entries that Utah would have prepared for its 2022 and 2023 year ends, assuming that 2022 was its first year of operations.
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Financial Accounting A User Perspective
Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry
6th Canadian Edition
470676604, 978-0470676608
