P8.3 (LO 1) (LCNRV—Cost-of-Goods-Sold and Loss) Malone Company determined its ending inventory at cost and at LCNRV at December 31, 2028, December 31, 2029, and December 31, 2030, as shown below.
Cost NRV
12/31/28 $650,000 $650,000
12/31/29 780,000 712,000
12/31/30 905,000 830,000
Instructions
a. Prepare the journal entries required at December 31, 2029, and at December 31, 2030, 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, 2029, and at December 31, 2030, assuming that a perpetual inventory is recorded at cost and reduced to LCNRV using the loss method.
