Prepare entry required to eliminate any valuation accounts

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Reference no: EM131891443

Problem

During July, Laesch Company, which uses a perpetual inventory system, sold 1,450 units from its LIFO-based inventory, which had originally cost $22 per unit. The replacement cost is expected to be $34 per unit.

In July, the company is planning to reduce its inventory and expects to replace only 340 of its units by December 31, the end of its fiscal year.

(1) Prepare the entry in July to record the sale of the 1,450 units.

(2) In December, the company decided not to replace any of the 1,450 units. Prepare the entry required on December 31 to eliminate any valuation accounts related to the inventory that will not be replaced.

Reference no: EM131891443

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