Raw material inventory at cost or market

Reference no: EM13915468

Question 1

At December 31, 2014, Indigo Girls Company has outstanding noncancelable purchase commitments for 57,480 gallons, at $3.30 per gallon, of raw material to be used in its manufacturing process. The company prices its raw material inventory at cost or market, whichever is lower.

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(b2)

Assuming that the market price as of December 31, 2014, is $2.20, record the journal entry? (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 6,225.)

Date

Account Titles and Explanation

Debit

Credit

Dec. 31

Reference no: EM13915468

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