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In: Accounting

Bridgeport Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is...

Bridgeport Co. follows the practice of valuing its inventory at the lower-of-cost-or-market. The following information is available from the company’s inventory records as of December 31, 2020.

Item

Quantity

Unit Cost

Replacement
Cost/Unit

Estimated Selling
Price/Unit

Completion & Disposal
Cost/Unit

Normal Profit
Margin/Unit

A 1,800 $8.18 $9.16 $11.45 $1.64 $1.96
B 1,500 8.94 8.61 10.25 0.98 1.31
C 1,700 6.10 5.89 7.85 1.25 0.65
D 1,700 4.14 4.58 6.87 0.87 1.64
E 2,100 6.98 6.87 7.30 0.76 1.09

Greg Forda is an accounting clerk in the accounting department of Bridgeport 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.
Calculate the lower-of-cost-or-market using the individual-item approach.

Lower-of-Cost-or-Market
(Per unit basis)

Item A $
Item B $
Item C $
Item D $
Item E $

SHOW LIST OF ACCOUNTS

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

Account Titles and Explanation

Debit

Credit

Cost of Goods sold Method:      
The Loss method:

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