Purple Corp. had a fire sprinkler go off in a warehouse, damaging 800 units of its regular inventory. Information with respect to the units:

• Cost, $52 per unit

• Regular selling price, $89 per unit

• Estimated selling price once repaired, $42 per unit

• Estimated repair cost, $18 per unit

• Variable selling cost, $4 per unit

The company keeps perpetual inventory records

Required:

1. Determine the value to be assigned to each damaged unit.

2. Assume that the company segregates damaged inventory in a separate account. Provide the journal entry.