Crane Company began operations in 2019 and determined its ending inventory at cost and at lower-of-LIFO...

Crane Company began operations in 2019 and determined its ending inventory at cost and at lower-of-LIFO cost-or-market at December 31, 2019, and December 31, 2020. This information is presented below:

	Cost	Lower-of-Cost-or-Market
12/31/19	$355,290	$336,930
12/31/20	414,220	400,040

(a) Prepare the journal entries required at December 31, 2019, and December 31, 2020, assuming that the inventory is recorded at market, and a perpetual inventory system (cost-of-goods-sold method) is used. (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 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
12/31/19

12/31/20

(b) Prepare journal entries required at December 31, 2019, and December 31, 2020, assuming that the inventory is recorded at market under a perpetual system (loss method is used). (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 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
12/31/19

12/31/20

(c) Which of the two methods above provides the higher net income in each year?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Skysong Company began operations in 2019 and determined its ending inventory at cost and at lower-of-LIFO...

Skysong Company began operations in 2019 and determined its ending inventory at cost and at lower-of-LIFO cost-or-market at December 31, 2019, and December 31, 2020. This information is presented below: Cost Lower-of-Cost-or-Market 12/31/19 $332,620 $312,620 12/31/20 375,420 359,540 (a) Prepare the journal entries required at December 31, 2019, and December 31, 2020, assuming that the inventory is recorded at market, and a perpetual inventory system (cost-of-goods-sold method) is used. (Credit account titles are automatically indented when amount is entered. Do...

Wildhorse Company began operations in 2019 and determined its ending inventory at cost and at lower-of-LIFO-cost-or-market...

Wildhorse Company began operations in 2019 and determined its ending inventory at cost and at lower-of-LIFO-cost-or-market at December 31, 2019, 2020 and 2021. This information is presented below. Cost Lower-of-Cost-or-Market December 31, 2019 $81,780 $66,740 December 31, 2020 94,000 92,120 December 31, 2021 91,180 91,180 Prepare the journal entries assuming that the inventory is recorded at market, and a perpetual inventory system (cost-of-goods-sold method) is used. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)...

P8-9 Milford Company determined its ending inventory at cost and at lower of cost and net...

P8-9 Milford Company determined its ending inventory at cost and at lower of cost and net realizable value at December 31, 2015, 2016, and 2017, as follows: Cost Lower of Cost and Net Realizable Value Dec. 31, 2015 $60,000 $60,000 Dec. 31, 2016 79,000 74,500 Dec. 31, 2017 78,800 69,000 Instructions (a) Prepare the journal entries that are required at December 31, 2016 and 2017, assuming that a periodic inventory system and the direct method of adjusting to NRV are...

As a result of its annual inventory count, Flounder Corp. determined its ending inventory at cost...

As a result of its annual inventory count, Flounder Corp. determined its ending inventory at cost and at lower of cost and net realizable value at December 31, 2019, and December 31, 2020. December 31, 2019, was Flounder’s first year end. This information is as follows: Cost Lower of Cost and NRV Dec. 31, 2019 $ 321,700 $283,350 Dec. 31, 2020 386,000 351,250 A. Prepare the journal entries required at December 31, 2019 and 2020, assuming that the inventory is...

BE6-3 Compute ending inventory using FIFO and LIFO. In its first month of operations, Bethke Company...

BE6-3 Compute ending inventory using FIFO and LIFO. In its first month of operations, Bethke Company made three purchases of merchandise in the following sequence: (1) 300 units at $6, (2) 400 units at $7, and (3) 200 units at $8. Assuming there are 360 units on hand, compute the cost of the ending inventory under the (a) FIFO method and (b) LIFO method. Bethke uses a periodic inventory system. BE6-4 Compute the ending inventory using average-cost. Data for Bethke...

Crane Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis....

Crane Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis. Item No. Quantity Cost per Unit Cost to Replace Estimated Selling Price Cost of Completion and Disposal Normal Profit 1320 1,800 $3.58 $3.36 $5.04 $0.39 $1.40 1333 1,500 3.02 2.58 3.92 0.56 0.56 1426 1,400 5.04 4.14 5.60 0.45 1.12 1437 1,600 4.03 3.47 3.58 0.28 1.01 1510 1,300 2.52 2.24 3.64 0.90 0.67 1522 1,100 3.36 3.02 4.26 0.45 0.56 1573 3,600 2.02...

Crane Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis....

Crane Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis. Item No. Quantity Cost per Unit Cost to Replace Estimated Selling Price Cost of Completion and Disposal Normal Profit 1320 1,300 $3.23 $3.03 $4.55 $0.35 $1.26 1333 1,000 2.73 2.32 3.54 0.51 0.51 1426 900 4.55 3.74 5.05 0.40 1.01 1437 1,100 3.64 3.13 3.23 0.25 0.91 1510 800 2.27 2.02 3.28 0.81 0.61 1522 600 3.03 2.73 3.84 0.40 0.51 1573 3,100 1.82...

4. Dutch Company has the following products in its ending inventory. Compute the lower of cost...

4. Dutch Company has the following products in its ending inventory. Compute the lower of cost or market for inventory (a) as a whole and (b) applied separately to each product. Per Unit Product Quantity Cost Market Wooden Shoes 25 $ 65 $ 50 Cheese Rounds 20 40 45 Granny Bikes 40 85 80 5. On the date of the balance sheet, Armani Co. had $10,000 of inventory in transit to Saks Company via a public carrier. A) Should...

Calculate the cost of goods sold and the cost of the ending inventory using the LIFO...

Calculate the cost of goods sold and the cost of the ending inventory using the LIFO periodic cost flow assumption. Sales 97 units at $ 18 per unit Beginning inventory 88 units at $ 6 per unit Purchases 58 units at $ 10 per unit Calculate the cost of goods sold using the LIFO periodic cost flow assumption. Units x Cost per Unit = Total Cost Units from beginning inventory x = Units from purchase x = Cost of Goods...

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and...

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 35 per unit Direct labor $ 55 per unit Overhead costs Variable $ 40 per unit Fixed $ 6,300,000 (per year) Selling and administrative costs for the year Variable $ 750,000 Fixed $ 5,000,000 Production and sales for the year Units produced 105,000 units Units sold 75,000 units Sales price per unit $...

Subjects