S&C Inc. has the following LIFO perpetual inventory records: Date Purchases Cost
ID: 2609594 • Letter: S
Question
S&C Inc. has the following LIFO perpetual inventory records:
Date
Purchases
Cost of Goods Sold
Inventory on Hand
December 1
$3,000
December 7
$900
$3,900
December 18
$900
$3,000
December 31
$200
$3,200
The current replacement cost of the ending inventory is $2,400. To apply the
lowerminusofminuscostminusorminusmarket
rule, the journal entry would be:
A.
debit Cost of Goods Sold $800, credit Inventory $800
B.
debit Inventory $900, credit Cost of Goods Sold $900
C.
debit Inventory $800, credit Cost of Goods Sold $800
D.
debit Cost of Goods Sold $900, credit Inventory $900
Date
Purchases
Cost of Goods Sold
Inventory on Hand
December 1
$3,000
December 7
$900
$3,900
December 18
$900
$3,000
December 31
$200
$3,200
Explanation / Answer
Please find below the answer and please give thumbs up Statementshowing Computations Paticulars Amount Cost of ending inventory 3,200.00 Replacement Cost or market value 2,400.00 Lower of cost or market value 2,400.00 Thus inventory needs to be reduced by 800 (3200 - 2400) A. debit Cost of Goods Sold $800, credit Inventory $800
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