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Presented below is information related to Bramble Enterprises.


Jan. 31 Feb. 28 Mar. 31 Apr. 30

Inventory at cost $17,100 $17,214 $19,380 $15,960

Inventory at LCNRV 16,530 14,364 17,784 15,162

Purchases for the month 19,380 27,360 30,210

Sales for the month 33,060 39,900 45,600


From the information, prepare (as far as the data permit) monthly income statements in columnar form for February, March, and April. The inventory is to be shown in the statement at cost; the gain or loss due to market fluctuations is to be shown separately (using a valuation account).

Respuesta :

anthougo

Answer:

Bramble Enterprises' Income Statement is attached.

Explanation:

The inventory valuation losses determined by comparing the inventory at cost with inventory at the lower of cost and net realizable value.

In all cases, the net realizable values were lower than the costs.  Therefore, the total costs were adjusted to show the loss in income.

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Answer:

The valuation of inventory at Lower of costs or net realizable value always calls for adjustments to our inventory balances.

As a standard, the impact of this valuation must go against the costs of sales as an added cost if the valuation is lower than the inventory costs. but a benefit by way of lowering the cost of sales if the valuation is higher than the cost of inventory.

For the 3 months respectively we see valued costs lower than the inventory costs, therefore cost of sales will go up by these adjustments:

Feb $2,850

March $1,596

April $798

See attached document for the complete presentation

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