1. (LCNRV-Cost-of-Goods-Sold and Loss) Malone Company determined its ending inventory at cost and at LCNRV at December 31, 2017, December 31, 2018, and December 31, 2019, as shown below.
| |
Cost
|
NRV
|
|
12/31/17
|
$650,000
|
$650,000
|
|
12/31/18
|
780,000
|
712,000
|
|
12/31/19
|
905,000
|
830,000
|
Instructions
(a) Prepare the journal entries required at December 31, 2018, and at December 31, 2019, assuming that a perpetual inventory system and the cost-of-goods-sold method of adjusting to LCNRV is used.
(b) Prepare the journal entries required at December 31, 2018, and at December 31, 2019, assuming that a perpetual inventory is recorded at cost and reduced to LCNRV using the loss method.