A company reports inventory using the lower-of-cost-or-market method. Below is information related to its year-end inventory (assume the company applies lower-of-cost-or-market rule to each inventory item separately): Inventory Quantity Cost per Unit Market per Unit

Item A ............130............ $25......... $30

Item B ..............30 ..............30............20

a. Calculate ending inventory under lower-of-cost-or-market.

b. Prepare the necessary adjusting entry to inventory. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)