Before the following financial statement was released, it was discovered that the current net realizable value of ending inventory was $96,000.

1. Journalize the entry to apply the lower-of-cost-and-net-realizable-value rule to the inventory on August 31, 2023. No explanation is required.

2. Prepare a revised income statement to apply the lower-of-cost-and-net-realizablevalue rule to Wire Solutions Company’s inventory.

3. What is the inventory balance that would be reported on the Wire Solutions Company’s balance sheet? How would it be reported?

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WIRE SOLUTIONS COMPANY Income Statement (partial) For the Month Ended August 31, 2023 Sales revenue Cost of goods sold Beginning inventory Net purchases Cost of goods available for sale Less: Ending inventory Cost of goods sold Gross margin $82,000 243,700 325,700 105,700 $320,000 220,000 $100,000