Adjustments to lower of cost and NRV
The controller of Utah Corp. has provided you with the following information relating to its inventory:
$$\begin{array} { c c c }
\text { Date } & \text { Cost } & \text { Lower of cost and NFN } \
\operatorname { Dec } 31 / 17 & \$ 457,000 & \$ 410,000 \
\operatorname { Dec } 31 / 18 & \$ 615,000 & \$ 555,000
\end{array}$$ Utah uses the periodic inventory system, and records its inventory at cost. An allowance account is adjusted at the end of each year to adjust the value of the inventory to the lower of cost and NRV.
Instructions
Prepare the journal entries that Utah would have prepared for its 2019 and 2020 year ends, assuming that 2019 was its first year of operations.

Question

Adjustments to lower of cost and NRV
The controller of Utah Corp. has provided you with the following information relating to its inventory:
 $$\begin{array} { c c c } 
\text { Date } & \text { Cost } & \text { Lower of cost and NFN } \
\operatorname { Dec } 31 / 17 & \$ 457,000 & \$ 410,000 \
\operatorname { Dec } 31 / 18 & \$ 615,000 & \$ 555,000
\end{array}$$ Utah uses the periodic inventory system, and records its inventory at cost. An allowance account is adjusted at the end of each year to adjust the value of the inventory to the lower of cost and NRV.
Instructions
Prepare the journal entries that Utah would have prepared for its 2019 and 2020 year ends, assuming that 2019 was its first year of operations.

Quizplus · Accepted Answer

The Answer of Adjustments to lower of cost and NRV
The controller of Utah Corp. has provided you with the following information relating to its inventory:
 $$\begin{array} { c c c } 
\text { Date } & \text { Cost } & \text { Lower of cost and NFN } \
\operatorname { Dec } 31 / 17 & \$ 457,000 & \$ 410,000 \
\operatorname { Dec } 31 / 18 & \$ 615,000 & \$ 555,000
\end{array}$$ Utah uses the periodic inventory system, and records its inventory at cost. An allowance account is adjusted at the end of each year to adjust the value of the inventory to the lower of cost and NRV.
Instructions
Prepare the journal entries that Utah would have prepared for its 2019 and 2020 year ends, assuming that 2019 was its first year of operations.

Adjustments to Lower of Cost and NRV the Controller of Utah

Adjustments to Lower of Cost and NRV
the Controller of Utah