Exhibit 8-3
The J. Love Company uses a periodic inventory accounting system and values its inventory by using the lower of cost or NRV rule. The allowance method is used in applying the lower of cost or NRV rule. The company adjusts and closes its books annually on December 31. Below are the cost and market values of the company's year-end inventories for a three-year period:
-Refer to Exhibit 8-3. Which of the following journal entries would be correct as of December 31, 2020, to apply the lower of cost or market rule?

Question

Exhibit 8-3
The J. Love Company uses a periodic inventory accounting system and values its inventory by using the lower of cost or NRV rule. The allowance method is used in applying the lower of cost or NRV rule. The company adjusts and closes its books annually on December 31. Below are the cost and market values of the company's year-end inventories for a three-year period: 
-Refer to Exhibit 8-3. Which of the following journal entries would be correct as of December 31, 2020, to apply the lower of cost or market rule?

Quizplus · Accepted Answer

The Answer of Exhibit 8-3
The J. Love Company uses a periodic inventory accounting system and values its inventory by using the lower of cost or NRV rule. The allowance method is used in applying the lower of cost or NRV rule. The company adjusts and closes its books annually on December 31. Below are the cost and market values of the company's year-end inventories for a three-year period: 
-Refer to Exhibit 8-3. Which of the following journal entries would be correct as of December 31, 2020, to apply the lower of cost or market rule?

Exhibit 8-3 The J. Love Company Uses a Periodic Inventory Accounting System