The Peter Park Company Began Operations in Early 2018

question 31

Essay

The Peter Park Company began operations in early 2018. At December 31, 2018, the company's ending inventory's c the inventory at this date was $11,800. Peter Park values its inventory at lower of cost or market applied on an individ inventory system. Below is information relating to Peter's inventory at December 31, 2019:
a.
Assuming that the company uses the allowance method, prepare the required entry at December 31, 2018, to record the inventory at lower of cost or market.
b. Prepare a schedule to calculate the inventory's value as of December 31, 2019, using the lower of cost or market method applied using the LIFO method. The schedule should contain the following column headings: Item, Upper Constraint, Lower Constraint, Applicable Unit Inventory Value, Number of Units, and Total Inventory Value.
c. Prepare the required entry at December 31, 2019, to record the inventory at lower of cost or market. Assume the allowance method is used.

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Definitions:

Technological Advance

The development and application of innovative tools, machines, systems, and methods to improve processes, productivity, and efficiency.

Production Possibilities Curve

A graphical representation showing the maximum combination of goods or services that can be produced with a fixed amount of resources.

Opportunity Cost

The price paid for not selecting the immediate alternative choice while deciding.

Production Possibilities Curve

A graphical representation showing the maximum combinations of goods or services an economy can produce given its resources and technology.