Practice Exercise 9-2 (Part Level Submission) Cost Lower-of-Cost-or-Market (a) D
ID: 2529200 • Letter: P
Question
Practice Exercise 9-2 (Part Level Submission)
Cost
Lower-of-Cost-or-Market
(a)
Date
Account Titles and Explanation
Debit
Credit
12/31/16
12/31/17
12/31/18
Practice Exercise 9-2 (Part Level Submission)
Sandhill Company began operations in 2016 and determined its ending inventory at cost and at lower-of-LIFO-cost-or-market at December 31, 2016, and December 31, 2017. This information is presented below.Cost
Lower-of-Cost-or-Market
December 31, 2016 $80,040 $65,320 December 31, 2017 92,000 90,160 December 31, 2018 89,240 89,240Explanation / Answer
Date Account Titles and Explanation Debit ($) Credit ($) 12/31/16 Cost of Goods Sold 14,720 Allowance to reduce inventory to market 14,720 [$80,040 - $65,320] 12/31/17 Allowance to reduce inventory to market 12,880 Cost of Goods Sold 12,880 [$14,720 - ($92,000 - $90,160)] 12/31/18 Allowance to reduce inventory to market 1,840 Cost of Goods Sold 1,840 [$14,720 - $12,880]
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