Prepare the journal entries required at December

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Question - Oriole Company began operations in 2020 and determined its ending inventory at cost and at LCNRV at December 31, 2020, and December 31, 2021. This information is presented below.

 

Cost

Net Realizable Value

12/31/20

$340,890

$315,290

12/31/21

439,200

417,500

Required -

(a) Prepare the journal entries required at December 31, 2020, and December 31, 2021, assuming inventory is recorded at LCNRV and a perpetual inventory system using the cost-of-goods-sold method.

(b) Prepare journal entries required at December 31, 2020, and December 31, 2021, assuming inventory is recorded at LCNRV and a perpetual system using the loss method.

(c) Which of the two methods above provides the higher net income in each year?

Reference no: EM132760610

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