Bordon gathered the following information for inventory at December 31, 2016:
Inventory item #XP101; Quantity 100; Unit Cost $50; Market (replacement cost) $49
Inventory item #CD99; Quantity 60; Unit Cost $50; Market (replacement cost) $55
Inventory item #MO45; Quantity 40; Unit Cost $60; Market (replacement cost) $73
Inventory item #LS86; Quantity 10; Unit Cost $40; Market (replacement cost) $43
Inventory item #MS82; Quantity 70; Unit Cost $100; Market (replacement cost) $90
Required:
a. Calculate the value of inventory using the lower of cost or market.
b. Prepare the journal entry to write down the inventory.