On april 1, robert llc purchased two units of inventory, a and b. the cost of unit a was $660, and the cost of unit b was $595. on april 30, robert llc had not sold the inventory. the net realizable value of unit a was now $670 while the net realizable value of unit b was $510. the adjustment associated with the lower of cost and net realizable value on april 30 will be:

Adjustment entry:

Cost of goods Sold A/c Dr.             $85

         To Inventory                                       $85

Explanation:

As for the provided information, using specific identity method, both goods are considered different and evaluated separately:

Goods A

Cost = $660, Net realizable value = $670

Therefore, it will be valued at cost of $595, thus, no adjustment required.

Goods B

Cost = $595, Net Realizable Value = $510

Thus, it will be valued at net realizable value.

The difference that is $595 - $510 = $85 will be written off from inventory and will be charged to cost of goods sold.

Entry will be:

Cost of goods Sold A/c Dr.             $85

         To Inventory                                       $85

This will reduce the balance of inventory by $85, and will follow lower of cost or Net Realizable Value method.

years agooo ahaha. but honestly they need to update ! : )

answer(b) equal; set period;