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.

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know