E9 - Print by Denise Williams ACCT 331-001 Ch.9 E9-5...

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Print by: Denise Williams ACCT 331-001 / Ch.9 E9-5 Correct. (Lower-of-Cost-or-Market – Valuation Account) Presented below is information related to Candlebox Enterprises. Jan. 31 Feb. 28 Mar. 31 Apr. 30 Inventory at cost $15,000 $15,100 $17,000 $13,000 Inventory at the lower-of-cost-or- market 14,500 12,600 15,600 12,300 Purchases for the month 20,000 24,000 26,500 Sales for the month 29,000 35,000 40,000 Instructions (a) From the information, prepare (as far as the data permit) monthly income statements in columnar form for February, March, and April. The inventory is to be shown in the statement at cost, the gain or loss due to market fluctuations is to be shown separately, and a valuation account is to be set up for the difference between cost and the lower of cost or market. (Enter all amounts as positive amounts and subtract where necessary.) February March April Sales $ 29000 $ 35000 $ 40000 Cost of goods sold
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Inventory, beginning 15000 15100 17000 Purchases 20000 24000 26500 Cost of goods available 35000 39100 43500 Inventory, ending 15100 17000 13000 Cost of goods sold 19900 22100 30500 Gross Profit 9100 12900 9500 Gain (loss) due to market fluctuations of inventory 2000 1100 700
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