Gloria's Gift Shop uses a perpetual inventory system and the FIFO cost formula for valuing inventory. The company is now in the process of comparing the cost of its inventory with its net realizable value. The following data are available at Gloria's Gift Shop's year end, December 31:

Instructions
(a) Determine the lower of cost and net realizable value of the ending inventory assuming Gloria's Gift Shop applies LCNRV on individual items.
(b) Prepare the journal entry required, if any, to record the adjustment from cost to net realizable value?

Transcribed Image Text:

Clothing Jewellery Greeting cards Stuffed toys Units 95 72 47 56 Unit Cost $ 7 20 Net Realizable Value per Unit $ 6 28 12 39