Question: A company reports inventory using the lower-of-cost and net realizable value. Below is information related to its year-end inventory: Inventory Quantity Cost NRV Item A

A company reports inventory using the lower-of-cost and net realizable value. Below is information related to its year-end inventory:

InventoryQuantityCostNRV
Item A100$25$30
Item B50$30$20

a. Calculate ending inventory under the lower-of-cost and net realizable value.

b. Prepare the necessary adjusting entry to inventory.

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