Archer Corp. has the following LIFO perpetual inventory records:
Date | Purchases | Cost of Goods Sold | Inventory on Hand |
December 1 | | | $4,150 |
December 7 | $1,500 | | $5,650 |
December 18 | | $1,200 | $4,450 |
December 31 | $1,400 | | $5,850 |
The current replacement cost of the ending inventory is $3,800. To apply the lower-of-cost-or-market rule, the journal entry would be:
◦ Debit Inventory $2,050, credit Cost of Goods Sold $2,050,
◦ Debit Cost of Goods Sold $2,050, credit Inventory $2,050,
◦ Debit inventory $1,200, credit Cost of Goods Sold $1,200
◦ Debit Cost of Goods Sold $1,200, credit Inventory $1,200