Bluebell Company sells blue jeans. Last year, bell-bottom jeans were fashionable

Question

Bluebell Company sells blue jeans. Last year, bell-bottom jeans were fashionable; this year, boot cut jeans are in style. The company has 565 units of bell-bottom jeans with a cost of $26.50 per unit and a market value of $24.50 per unit. The inventory also includes 1,190 units of boot cut jeans with a cost of $25.50 per unit and a market value of $28.50 per unit.

Required: Prepare the journal entry, if any, that is required to adjust the Inventory account. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

General Journal Question: Record the entry for cost of merchandise sold on account from inventories.

Explanation / Answer

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Assuming : Inventory Cost : Lower of Cost or Market Value of Inventory Cost of Bell Bottom Jeans 565 Units X 26.50      14,972.50 Mkt Value of Bottom Jeans 565 Units X 24.50      13,842.50 Loss on Value of Inventory        1,130.00

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