Accounting lower of cost or market,?

Question

Please teach me how I can record them...
Cost $15,520, Market value $15,472 Lower of C or M $ 15,070, the market decline$ 450 ($15,472-15,520)

Dr expense 450
Cr merchandise inventory 450


or Should it be ??
Dr Cost of goods sold 450
Cr merchandise inventory 450


It the item is sold,
Dr Cash 15,472
Cr Sales 15,472

Then,
Dr COGS 15,070
Cr Inventory 15,070


Are these correct???

Answer 1

If Cost is $15,520 and Market is $15,472, then the lower of C or M would be $15,472 cos that's lower than $15,520. Since you're told that the lower of C or M is $15,070, I presume that incidental expenses like selling expenses are $402. The drop in value is $15,520 - $15,070 = $450
Your entry would be :
Dr Expense (e.g. stocks write-down) $450
Cr Merchandise inventory $450

When the goods are sold for $15,472, you'd:
Dr Accounts receivable (or cash) $15,472
Cr Sales $15,472

Dr Expenses (e.g. Selling expenses) $402
Cr Cash $402

Dr COGS $15,070
Cr Merchandise inventory $15,070