Nutriset Foods reports merchandise inventory at the lower-of-cost-or-market. Prior to releasing its financial statements for the year ended March 31, 2025, Nutriset’s preliminary income statement, before the year-end adjustments, appears as follows:

Nutriset has determined that the current replacement cost of ending merchandise inventory is $19,500. Cost is $24,000.

Requirements
1. Journalize the adjusting entry for merchandise inventory, if any is required.
2. Prepare a revised partial income statement to show how Nutriset Foods should report sales, cost of goods sold, and gross profit.

Transcribed Image Text:

NUTRISET FOODS Income Statement (Partial) Year Ended March 31, 2025 Net Sales Revenue Cost of Goods Sold Gross Profit $ 118,000 47,000 $ 71,000