The Key West Group uses the lower of cost and net realizable value rule to value its kayak inventory. The Kayaks in inventory were purchased on January 1, 2012 for $12,000. At year end December 31, 2012 the net realizable value of Key West's inventory dropped to $9,000. At the end of 2013 due to a shortage of Kayaks this inventory increased in value to $15,000.
Required:
Prepare the required journal entries (if any) required at the 2012 and 2013 year end.

Question

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The Answer of The Key West Group uses the lower of cost and net realizable value rule to value its kayak inventory. The Kayaks in inventory were purchased on January 1, 2012 for $12,000. At year end December 31, 2012 the net realizable value of Key West's inventory dropped to $9,000. At the end of 2013 due to a shortage of Kayaks this inventory increased in value to $15,000.
Required:
Prepare the required journal entries (if any) required at the 2012 and 2013 year end.

The Key West Group Uses the Lower of Cost and Net