Cypress Co. has the following LIFO perpetual inventory records: Date December 1

Question

Cypress Co. has the following LIFO perpetual inventory records: Date December 1 December 7 December 18 December 31 $1,700 Purchases Cost of Goods Sold Inventory on Hand $4,250 $5,750 $4,450 $6,150 $1,500 $1,300 The current replacement cost of the ending inventory is $3,600. To apply the lower-of-cost-or-market rule, the journal entry would be: O A. Debit Inventory $2,550, credit Cost of Goods Sold $$2,550 O B. Debit Cost of Goods Sold $2,550, credit Inventory $2,550 ° C. Debit inventory $1,300, credit Cost of Goods Sold $1,300 O D. Debit Cost of Goods Sold $1,300, credit Inventory $1,300

Explanation / Answer

Answer is B

General Journal Debit Credit Cost of Goods Sold($6,150 - $3,600) $2,550 Inventory $2,550

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