At the End of the First Year of a Firm's

question 165

Essay

At the end of the first year of a firm's operations,the total inventory at cost was $200 and the market value (for purposes of Lower of Cost or NRV valuation) was $220.The corresponding values at the end of years 2 and 3 are as follows: $$\begin{array} { l l l } & \text { Year 2 } & \text { Year 3 } \\\hline \text { Cost } & \$ 400 & \$ 600 \\\hline \text { Market } & 340 & 640\end{array}$$ Required: provide the adjusting entries at the end of years 2 and 3 to record inventory at Lower of Cost or NRV using:
(a) the direct reduction method,and
(b) the inventory allowance method.

---

Definitions:

Genetic Engineering

The manipulation of an organism's genes using biotechnology to create desired phenotypes or to eliminate undesired traits.

Psychological Disorder

A term that identifies mental health conditions marked by alterations in thinking, mood, or behavior associated with distress or impaired functioning.

Genetic Factors

Elements of an organism's genetic makeup that influence its characteristics, traits, and susceptibility to certain conditions or diseases.

Environmental Factors

External elements, including social, geographical, and climatic factors, that affect individuals and their behavior.