At December 31, the Selig Company has ending inventory with a historical cost of $633,000....
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At December 31, the Selig Company has ending inventory with a historical cost of $633,000. Assume the company uses the FIFO perpetual inventory system. The net realizable value is $616,000. The normal profit on this inventory is $50,000. Before any adjustments at the end of the period, the cost of goods sold account has a balance of $900,000. Following U.S. GAAP, which journal entry is required on December 31 to adjust the ending balance of inventory if the direct method is used? O A. Debit Inventory for $33,000 and credit Cost of Goods Sold for $33,000. O B. Debit Cost of Goods Sold for $17,000 and credit Inventory for $17,000. OC. Debit Inventory for $17,000 and credit Cost of Goods Sold for $17,000. O D. Debit Cost of Goods Sold for $33,000 and credit Inventory for $33,000. Danzig Inc. factors $6,000,000 of its accounts receivables without recourse for a finance charge of 5%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. What would be recorded by Danzig as a gain (loss) on the transfer of receivables? O A. loss of $600,000 O B. loss of $900,000 O C. loss of $300,000 O D. gain of $300,000
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