Module6HW - P93() ,2009,December31,2010,and...

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P9-3 (Entries for Lower-of-Cost-or-Market—Direct and Allowance) Malone Company determined its ending inventory at cost and at lower-of-cost-or-market at December 31, 2009, December 31, 2010, and December 31, 2011, as shown below. Cost Lower-of-Cost-or-Market 12/31/2009 650000 650000 12/31/2010 780000 712000 12/31/2011 905000 830000 Instructions (a) Prepare the journal entries required at December 31, 2010, and at December 31, 2011, assuming that a perpetual inventory system and the direct method of adjusting to lower-of-cost-or-market is used. (b) Prepare the journal entries required at December 31, 2010, and at December 31, 2011, assuming that a perpetual inventory is recorded at cost and reduced to lower-of-cost-or-market through the use of an allowance account (indirect method). a) Direct Method 12/31/2010 To Reduce inventory from cost to market: COGS 68000 Inventory 68000 12/31/2011 To Reduce inventory from cost to market: COGS 75000 Inventory 75000 b) Indirect Method 12/31/2010 68000 68000 12/31/2011 75000 75000 Loss Due to Market  Decline of Inventory Reduce Inventory to  Market Loss Due to Market  Decline of Inventory Reduce Inventory to  Market
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Problem 9-5 -- Gross Profit Method STANISLAW CORPORATION Trial Balance 31-Mar-11 Cash                                  $ 20,000 ST Accounts receivable                40,000 Inventory, 12/31/10               75,000 Land                                     35,000
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This note was uploaded on 04/06/2011 for the course ACC 300 taught by Professor Barga during the Spring '11 term at Catholic Central High School, Lethbridge.

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Module6HW - P93() ,2009,December31,2010,and...

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