Prepare the appropriate journal entries to record inventory

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Question - Glover Corp. sells handheld electronic devices. At the end of 2017, the company had a large stock of inventory that became obsolete. The current inventory had a laid-down cost of $107,000. The company estimated that this old inventory could be sold for approximately $85,000. The regular commission on sales is 10% but sales personnel were given additional 5% to further accelerate the sales.

In early 2018, the company discovered that some of the inventory could be upgraded and modified which would allow the product to compete effectively in the market. In February 2018, these inventories were upgraded at a cost of $10,000. The company estimated that after the conversion, the newly adapted inventory could be sold for $118,000 (before regular commission) in the market.

Required - Using the valuation allowance method, prepare the appropriate journal entries to record inventory adjustments for 2017 and 2018.

Reference no: EM133075550

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