INVENTORIES COMPOSITION AND LCNRV Group2 Deadline Aug 31

enny Company uses a periodic inventory accounting system and values its inventory by using the lower of cost or market rule. The allowance method is used in applying the lower of cost or market rule. The company adjusts and closes its book annually on December 31. Below are the cost and market val ... ues of the company’s year-end inventories for a three-year period: Date December 31, 2020 December 31, 2021 December 31, 2022 Cost 700,000 560,000 640,000 Market 700,000 460,000 580,000 Which of the following journal entries would be correct as of Dec. 31, 2022, to apply the lower of cost or market rule? A. Inventory 580,000 Income summary 580,000 B. Loss Due to Market Valuation 60,000 Allowance to Reduce Inventory to Market 60,000 C. Allowance to Reduce Inventory to Market 40,000 Recovery Due to Market Valuation 40,000 D. Cost of Goods Sold 60,000 Allowance to Reduce Inventory to Market 60,000 1. Allowance for write down 2021 (560,000 – 460,000) Allowance for write down 2022 (640,000 – 580,000) Reversal of write down 2022 100,000 60,000 40,000 C 1)Angela Company reported the ending inventory on December 31, 2022 at P4,000,000. None of the following items were included when the total amount of the ending inventory was computed: Goods that are on consignment to another entity 200,000 Goods sold by the entity and shipped FOB destination were in transit on December 31, 2022 and received by the customer on January 2, 2023 400,000 Goods purchased by the entity and shipped FOB seller in transit December 31, 2022 and received by the entity on January 2, 2023 600,000 Goods sold by the entity and shipped FOB shipping point were in transit on December 31, 2022 and received by the customer on January 2, 2023 800,000 What is the correct amount of inventory on December 31, 2022? A. 5,000,000 B. 5,200,000 C. 6,000,000 D. 4,600,000 1. Unadjusted balance of inventory +sent out on consignment +sold in transit FOB destination +purchase on transit FOB seller Adjusted balance 4,000,000 200,000 400,000 600,000 5,200,000 B 1) Madel Company revealed inventory on December 31, 2023 at P3,250,000 based on a physical count priced at cost, and before any necessary adjustment for the following:  Merchandise costing P300,000 shipped FOB shipping point from a vendor on December 30, 2023, was received on January 5, 2024.  Merchandise costing P220,000 shipped FOB destination from a vendor on December 28, 2023 was received on January 3, 2024.  Merchandise costing P380,000 was shipped to a customer FOB destination on December 28, 2023 arrived at the customer’s location on January 6, 2024.  Merchandise costing P120,000 was being held on consignment by Trisha Company. What amount should be reported as inventory on December 31, 2023? A. 3,670,000 B. 3,930,000 C. 4,050,000 D. 3,250,000 1. Inventory based on physical count * Inventory purchased in transit FOB shipping point * Inventory sold in transit FOB destination * Inventory sent out consignment [Show More]