Exercise 143 (Part Level Submission) (a) Date Account Titles and Explanation Deb

Question

Exercise 143 (Part Level Submission)

(a)

Date

Account Titles and Explanation

Debit

Credit

12/31/17

Exercise 143 (Part Level Submission)

At 12/31/17, the end of Jenner Company's first year of business, inventory was $6,100 and $5,100 at cost and at market, respectively.

Following is data relative to the 12/31/18 inventory of Jenner:
Item Original Cost
Per Unit Replacement
Cost A $ .65 $ .45 B .45 .40 C .70 .75 D .75 .65 E .90 .85
Selling price is $1.00/unit for all items. Disposal costs amount to 10% of selling price and a "normal" profit is 30% of selling price. There are 1,500 units of each item in the 12/31/18 inventory.

Explanation / Answer

Solution a:

Journal Entries - Jenner Company Date Particulars Debit Credit 31-Dec-17 Cost of goods sold Dr ($6,100 - $5,100) $1,000       To Allowance to Reduce Inventory to Market $1,000 (To record inventory at cost or market value whichever is lower)

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