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Vanyuwa
6 days ago
15

A company like Golf USA that sells golf-related inventory typically will have inventory items such as golf clothing and golf equ

ipment. As technology advances the design and performance of the next generation of drivers, the older models become less marketable and therefore decline in value. Suppose that in the current year, Ping (a manufacturer of golf clubs) introduces the Mega Driver II, the new and improved version of the Mega Driver. Below are amounts related to Golf USA's inventory at the end of the year.
Inventory Quantity Cost NRV
Shirts 35 $60 $70
Mega Driver 15 360 250
Mega Driver II 30 350 420
Required:

1. Calculate ending inventory using the lower of cost and net realizable value.

2. Record any necessary adjustment to inventory.

3. Explain the impact of the adjustment in the financial statements.
Business
1 answer:
marusya05 [3.4K]6 days ago
4 0
1. $16,350. 2. Debit Inventory write-off (p/l) $1,650, Credit Inventory $1,650. 3. This adjustment will lead to a $1,650 decrease in the total assets, simultaneously increasing the total expenses by the same amount, thus lowering the net income.
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Response:

Clarification:

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