Looking for some help on basic accounting.
Freshwater Trade Mart has recently had lackluster sales. The rate of inventory turnover has dropped, and the merchandise is gathering dust. At the same time, competition has forced Freshwater suppliers to lower the prices that Freshwater will pay when it replaces its inventory. It is now December 31, 2016, and the current replacement cost of Freshwater ending inventory is $55,000 below what Freshwater actually paid for the goods, which was $270,000. Before any adjustments at the end of the period, the Cost of Goods Sold account has a balance of $790,000.
Requirement a.
Freshwater should apply the (average-cost method, First in first out, last in first out, lower-of-cost-or market) to account for inventories. Because the current replacement cost of ending inventory is (equal to, more than, less than) Freshwater's actual cost, so Freshwater must write the inventory (up, down) to current replacement cost.
requirement b.
journal entry for Dec 31
requirement c.
Freshwater should report inventory on the balance sheet at $______
requirement d.
Freshwater should report cost of good sold on the income statement at $______
requirement e.
(Consistency Principle, disclosure principle, materiality concept, representational Faithfulness) is the reason to account for inventory using (average cost, first in first out, last in first out, lower-of-cost-or-market) (Conservatism, Consistency, Disclosure, Materiality, Representational Faithfulness) directs accountants to report inventory at the most realistic and transparent amount.
where there is (a,b,c,d) must pick one. If anyone can help let me know I will have more questions, and if you are willing to just help for everything that would be awesome.