Question

Mariah Company has inventory at the end of the year with a historical cost of $ 91 comma 000. Mariah Company uses the perpetual inventory system. Under the LCM​ rule, the current replacement cost is $ 71 comma 600. The company uses LIFO. Under U.S.​ GAAP, the journal entry to record the writeminusdown to LCM​ will:

Answer 1

Answer:

Dr. Inventory Write down............(91,000 - 71,600)....$19,400

Cr. Inventory.......................................................................................$19,400

Explanation:

The write down of the inventory value from at the end of the year with a historical cost of $ 91,000 to the current replacement cost is $ 71,600 will be recorded as follows:

Journal Entries

Dr. Inventory Write down............(91,000 - 71,600)....$19,400

Cr. Inventory.......................................................................................$19,400

Being the write down of the value of inventory from historical cost to replacement cost at year end