Lower-Of-Cost-Or-Market
Elite Systems Sells a Single Product $$\begin{array} { | l | c | } \hline \text { Date } & \text { General Journal } \\\hline 20 & \\\hline\end{array}$$

question 112

Essay

Lower-of-cost-or-market
Elite Systems sells a single product. At December 31, the company's perpetual inventory records indicate 2,500 units on hand with a total cost (FIFO basis) of $155,000. The replacement cost of this product at this date is $35 per unit.
Prepare journal entries to record (a) the write-down of the inventory to the lower-of-cost-or-market value at December 31, and (b) the cash sale of 100 units on January 4 at a retail price of $50 per unit.
$$\begin{array} { | l | c | } \hline \text { Date } & \text { General Journal } \\\hline 20 & \\\hline\end{array}$$
(a) Dec. 31
(b) Jan. 4

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Definitions:

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price, often used by investors to gauge the income a company's stock will generate.

Dividend

A portion of a company's earnings that is distributed to shareholders, usually as cash or additional shares, as a reward for their investment in the company's equity.