At the beginning of November, Yoshi Inc.’s inventory consists of 60 units with a cost per unit of $94. The following transactions occur during the month of November.

November 2 Purchase 90 units of inventory on account from Toad Inc. for $100 per unit, terms 3/10, n/30.

November 3 Pay cash for freight charges related to the November 2 purchase, $231.

November 9 Return 13 defective units from the November 2 purchase and receive credit.

November 11 Pay Toad Inc. in full.

November 16 Sell 100 units of inventory to customers on account, $14,000. (Hint: The cost of units sold from the November 2 purchase includes $100 unit cost plus $3 per unit for freight less $3 per unit for the purchase discount, or $100 per unit.)

November 20 Receive full payment from customers related to the sale on November 16.

November 21 Purchase 70 units of inventory from Toad Inc. for $104 per unit, terms 2/10, n/30.

November 24 Sell 90 units of inventory to customers for cash, $12,600.

Required:

1. Assuming that Yoshi Inc. uses a FIFO perpetual inventory system to maintain its internal inventory records, record the transactions.

2. Suppose by the end of November that the remaining inventory is estimated to have a net realizable value per unit of $81, record any necessary adjustment for the lower of cost and net realizable value.

3. Prepare the top section of the multiple-step income statement through gross profit for the month of November after the adjustment for lower of cost and net realizable value.