Pronghorn Company began operations in 2017 and determined its ending inventory at cost and at LCNRV at December 31, 2017, and December 31, 2018. This information is presented below.
Cost Net Realizable Value
12/31/17 $348,040 $326,220
12/31/18 439,900 421,780
(a) Prepare the journal entries required at December 31, 2017, and December 31, 2018, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods-sold method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 12/31/17 12/31/18
(b) Prepare journal entries required at December 31, 2017, and December 31, 2018, assuming inventory is recorded at cost and a perpetual system using the loss method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 12/31/17 12/31/18
(c) Which of the two methods above provides the higher net income in each year? Both methods have the same effectCost-of-goods-sold methodLoss method Show List of Accounts Question Attempts: 0 of 5 used Save for later Submit Answer Copyright © 2000-2016 by John Wiley & Sons, Inc. or related companies. All rights reserved.