Copper Mining Inc

Essay

Copper Mining Inc. has been stock-piling copper inventory in anticipation of better prices. Unfortunately, the market has not improved and at year end, December 31, 2017, inventory with a cost of $4.5 million would only be worth $3.5 million if it could be sold.During the next year, the prices start to recover, but the company still has not sold the inventory. At December 31, 2018, the market value of the same copper inventory has increased and would be worth $4.6 million.Instructions
a. Prepare the adjusting entry required at December 31, 2017 to record the decline in the value of the inventory, assuming Copper Mining uses a perpetual inventory system.
b. Prepare the adjusting entry required at December 31, 2018, if any.