Lower-Of-Cost-And-Net-Realizable-Value
Elite Systems Sells a Single Product $$\begin{array} { | l | c | } \hline \text { Date } & \text { General Journal } \\\hline 20\_ & \\\hline\end{array}$$

question 31

Essay

lower-of-cost-and-net-realizable-value
Elite Systems sells a single product. At 31 December, the company's perpetual inventory records indicate 2,500 units on hand with a total cost (FIFO basis) of $155,000. The net realizable value 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- and-net-realizable-value value at 31 December, and (b) the cash sale of 100 units on 4 January 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:

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