At the end of the year,Katerinos Company is applying the lower-of-cost-or-market rule to inventory.The company uses the perpetual inventory system.The company has the following data before year-end adjustments:
Required:
1.Following U.S.GAAP,prepare the required journal entry at year-end.The company uses the direct method when applying the lower-of-cost-or-market rule.
2.Following IFRS,prepare the required journal entry at year-end.The company uses the direct method when applying the lower-of-cost-or-market rule.
Definitions:
Preferred Stock
A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often with predetermined dividends.
Debt Instrument
A written obligation to repay borrowed funds or debts under defined terms, such as bonds, notes, or mortgages.
Preemptive Rights
Privileges granted to existing shareholders to buy additional shares in the company before the shares are offered to the public, thereby protecting their ownership percentage.
Issued Stock
Refers to the number of shares that a company has officially issued to shareholders.
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