Dakota Industries Has Two Items in Inventory as of December $\begin{array}{lrr} \text { Inventory Loss } &&24\\ \text {Inventory } &24\\\end{array}$

question 46

Short Answer

Dakota Industries has two items in inventory as of December 31, 2017. Each item was purchased for $52. Company management chose to write down Item #1 to $39, which at year-end was assessed to be its market value. Management did not write down Item #2 because its market value was estimated to be greater than $52. During 2017, each item was sold for $63 cash.
The journal entry for the write down of Item #1 would include which of the following?
a.
$\begin{array}{lrr} \text { Inventory Loss } &&24\\ \text {Inventory } &24\\\end{array}$

b.
$\begin{array}{lrr} \text { Inventory} &&13\\ \text { Inventory Loss } &13\\\end{array}$

c.
$\begin{array}{lrr} \text {Inventory Loss } &&13\\ \text { Inventory } &13\\\end{array}$

d.
$\begin{array}{lrr} \text { Inventory} &&24\\ \text { Inventory Loss } &24\\\end{array}$

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Definitions:

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