IS THIS RIGHT OR WHAT IS THE CORRECT ANSWER Bluebell Company sells blue jeans. L

Question

IS THIS RIGHT OR WHAT IS THE CORRECT ANSWER

Bluebell Company sells blue jeans. Last year, bell-bottom jeans were fashionable; this year, boot cut jeans are in style. The company has 595 units of bell-bottom jeans with a cost of $28.00 per unit and a market value of $26.00 per unit. The inventory also includes 1,220 units of boot cut jeans with a cost of $27.00 per unit and a market value of $30.00 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.) View transaction list Journal entry worksheet Record the entry for cost of merchandise sold on account from inventories Note: Enter debits before credits. Transaction General Journal Debit Credit Cost of Goods Sold 1,190 Inventory 1,190 Record entry Clear entry View general journal

Explanation / Answer

inventory should be always valued at cost or maket value whicheve is lesser. in the given question 595 bill bottom units of jeans are have the cost is $ 28 per unit but the market value of the same is $ 26 per unit And, 1220 units of boot cuts have the cost is $ 27 per unit but market value is $ 30 if we value the inventory at cost or market value whichever is the less then the correct valuaiton of the inventory is done. Cost Total Cost Value Market Value Total Market Value Cost of market value whichever is less Qty Stock Value 595 Bill Bottom $                   28.00 $     16,660.00 $                   26.00 $           15,470.00 $                        26.00 595 $              15,470.00 1220 units of Boot cut jeans $                   27.00 $     32,940.00 $                   30.00 $           36,600.00 $                        27.00 1220 $              32,940.00 $     49,600.00 $           52,070.00 $              48,410.00 differnce is Total Cost and total Stock Value = $        1,190.00 ($ 49,600- $ 48,410) Journal Entry Debit Crdit Cost of Goods Sold 1190       To Inventory 1190 As, pet the above your calculation of totally correct or Right

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