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The Army Store Has an Ending Inventory of $630,000

question 172

Essay

The Army Store has an ending inventory of $630,000. The current replacement cost of the inventory is $608,000. Before any adjustments at the end of the period, the cost of goods sold account has a balance of $900,000.
Required:
1. What journal entry if any, should The Army Store make?
2. At what amount should The Army Store report inventory on its balance sheet?
3. At what amount should The Army Store report cost of goods sold on the income statement?
4. What accounting principle(s) is or are most relevant to this situation?


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