Adjustments to Lower of Cost and NRV
the Controller of Utah

question 25

Essay

Adjustments to lower of cost and NRV
The controller of Utah Corp. has provided you with the following information relating to its inventory:
$$\begin{array} { c c c } \text { Date } & \text { Cost } & \text { Lower of cost and NFN } \\\operatorname { Dec } 31 / 17 & \$ 457,000 & \$ 410,000 \\\operatorname { Dec } 31 / 18 & \$ 615,000 & \$ 555,000\end{array}$$ Utah uses the periodic inventory system, and records its inventory at cost. An allowance account is adjusted at the end of each year to adjust the value of the inventory to the lower of cost and NRV.
Instructions
Prepare the journal entries that Utah would have prepared for its 2019 and 2020 year ends, assuming that 2019 was its first year of operations.

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Definitions:

Gender Differences

Pertains to the distinctions in characteristics, behaviors, or attitudes observed between males and females, often influenced by social, cultural, and biological factors.

Endocrine Glands

Glands of the endocrine system that secrete hormones directly into the bloodstream to regulate various bodily functions.

Hormones

Chemical substances released into the bloodstream by the endocrine glands.

Gonads

The sex glands.