Question

In: Accounting

PER UNIT Inventory Quantity Cost Net Realizable Value(NRV) Class 1 Snowman A 50 100 120 Snowman...

PER UNIT

Inventory

Quantity

Cost

Net Realizable Value(NRV)

Class 1

Snowman A

50

100

120

Snowman B

30

150

140

Class 2

Sleigh A

120

90

100

Sleigh B

60

130

140

Sleigh C

40

200

150

Develop a table below to compute the amount of any adjustment that is required to inventory by individual type of item and by the class of inventory. Provide the journal entry for the adjustment first by the individual amount (direct method) and then by class (allowance method)

Solutions

Expert Solution

Answer

Inventory is valued at Cost or Net Realizable Value (NRV),  whichever is lower and if the NRV of inventory is less than the cost of  inventory , then the cost of the inventory should be written down to NRV.

Journal entry for the adjustment for individual amount (direct method)

Journal entry for the adjustment for class 2 inventory (allowance method)

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ekkarill92 answered 1 year ago
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