E$9\mathrm{.}5($LO $1)($LCNRV$-$Valuation Account$)$ Presented below is information related to Knig Enterprises.

$\backslash$table$[[,$Jan. $31,$Feb. $28,$Mar. $31,$Apr. $30],[$Inventory at cost$,$$$15,000,$$$15,100,$$$17,000,$$$14,000],[$Inventory at LCNRV$,14,500,12,600,15,600,13,300],[$Purchases for the month,,$17,000,24,000,26,500],[$Sales for the month,,$29,000,35,000,40,000]]$

Instructions

a$.$ From the information, prepare $($as far as the data permit$)$ monthly income statements in column form for February, March, and April. The inventory is to be shown in the statement at cost; the ga or loss due to market fluctuations is to be shown separately $($using a valuation account$).$

b$.$ Prepare the journal entry required to establish the valuation account at January $31($using the lo method$)$ and entries to adjust it monthly thereafter.