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25 March, 01:38

At the end of the year, inventory has a cost of $200,000 and a net realizable value of $195,000 due to normal business circumstances. Prepare the year-end adjusting entry, if any, for inventory using the lower of cost or net realizable value approach. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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  1. 25 March, 03:55
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    The answer is given below;

    Explanation:

    The adjusting entry will be;

    Income Statement Dr.$5,000

    Inventory Cr.$5,000

    As the NRV is less than cost, therefore difference amount will be charged to profit and loss account.
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