Summary And Chapters Of The Total Inventory General Ledger Accounting

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This shows the total inventory general ledger balance is $8,124,998.66. We footed the file.

We sorted the file to see all of the items that did not have a sale in the last 6 months. We would have to write these items down to zero.
Entry
Inventory Write Down Expense $133,414.66 Inventory $133,414.66

These Items have a NRV less than cost. We must write down the inventory to the NRV to correct this.
Inventory Write Down Expense $939.39
Inventory $939.39

This is the finished goods inventory that has a turnover ratio less than 2.
Total cost= $890,811.70

This is the raw goods that have a replacement cost less than the unit cost so we must write them down to equal the replacement cost of the items.
Inventory Write Down Expense $90,103.59 Inventory $90,103.59

These raw materials have a turnover less than 2.
Total = $25,818.90

Summary:
We found that some of the inventory had to be written down due to not selling (All Items), having a NRV less than cost (Finished Goods) and being cheaper to replace (Raw Materials). We have provided the proposed adjustments under each step. After making these adjustments we believe that the inventory amount will better reflect it true value.

(a)
1 – provided ACL output and explain what you did.
0 – did not provide ACL output or explain what you did
(b)
1 – correctly identified items not sold or used in the last six months and the total cost of those items.
0 – did not correctly identify items not sold or used in the last six months or did not provide the total cost
(b)
1 – provide a proposed adjustment based on results from part (b).
0 – did not provide a proposed adjustment based on results from part (b)
(c)(i)
1 – correctly identified finished goods with net realizeable value (NRV) less than cost and calculated the total of the differences.
0 – did not correctly identify finished goods with net realizeable value (NRV) less than cost or did not correctly calculate the total of the differences.
(c)(i)
1 – provide a proposed adjustment based on results from part (c)(i).
0 – did not provide a proposed adjustment based on results from part (c)(i).
(c)(ii)
1 – correctly identified finished goods with a turnover less than 2 and calculated their total cost.
0 – did not correctly identify finished goods with a turnover less than 2
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