Instructions a Prepare the entry at 123117 necessary to impl

Instructions (a) Prepare the entry at 12/31/17 necessary to implement the lower-of-cost-or-market procedure assuming Jenner uses a contra account for its balance sheet.

note payable and an 11%, 4-year, $12,000,000 note payable What amount of interest should be charged to expense? (10pts) (3) At 12/31/17, the end of Jewel Sewing Co. first year of business, inventory was $6,100 and $5,100 at cost and at market, respectively Following is data relative to the 12/31/18 inventory of Jenner Original Cost Per Unit $.65 Net Net Realizable Apropriate Value Less nventory Normal Profit Replacement Realizable Item Value Cost $.45 40 75 65 85 Value 70 75 90 Selling price is $1.00/unit for all items. Disposal costs amount to 10% of selling price and a \"normal\" profit is 30% of selling price. There are 1,500 units of each Om in the 12/31/18 inventory

Solution

Date Particulars Debit Credit 12/31/2017 Loss due to decline of inventory to Market 1000 Allowance to reduce inventory to market 1000 (Inventory adjusted to lwer of cost or market) (6100-5100)