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Required:
a. Record the journal entry needed on July 31,
2020, assuming that the company wants to
report materials inventory on its balance
sheet using the LCNRV method.
b. Record the journal entry needed the next
year on July 31, 2021 assuming the
following:
-NRV = P341,755
-The company uses the LCNRV method
c. At the end of the following year, July 31,
2022, the balance of Materials Inventory is
P337,740; and the NRV is P339,675. Prepare
the necessary journal entry, assuming that
the company still uses the LCNRV method.
4. Olive Corporation buys a material for P20 per
unit. Sixteen thousand parts a year are needed.
Carrying cost is P3.00 per unit and the ordering
cost is P15
a. Compute the EOQ.
b. Prepare a tabular analysis to compute the
total costs assuming the following order
sizes: 100 units, 200 units, 400 units, 1,600
units and 6,400 units. The table should have
the following columns: order size, number
of orders, cost per order, total ordering
costs, average inventory, carrying cost per
unit, total carrying costs, and total costs.