Problem 7-4 a-c, d1 (Part Level Submission) The purchase schedule for Lumbermans and Associates is as follows: Date Items Purchased Cost per Item March 15 $1.3 July 30 1.5 6,000 9,000 7,000 22,000 December 17 1.6 Total The inventory balance as of the beginning of the year was $15,000 (15,000 units at $1), and an inventory count at year-end indicated that 11,000 items were on hand. Sales and operating expenses (excluding cost of goods sold) totaled $55,000 and $15,000, respectively. The federal income tax is 30 percent of taxable income. Lumbermans and Associates Income Statements For the Year Ended December 31, 20XX FIFO Average LIFO Sales 55000 55000 55000 Cost of Goods Sold 30300 33376 36500 Gross Profit 24700 21624 18500 > > Operating Expenses 15000 15000 15000 Income Before Taxes 9700 6624 3500 Income Tax Expense 2910 1987 1050 Net Income / (Loss) 6790 4637 2450 AH Assume that the market value of an inventory item dropped to $1.35 as of year-end. Apply the lower-of-cost-or-market rule, and provide the appropriate journal entry (if necessary) under the FIFO, average, and LIFO assumptions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Debit Credit Account Titles and Explanation FIFO method: Inventory Loss Inventory (Adjusted inventory to LCM.) Average method: No Entry JO JU TO No Entry LIFO method: No Entry No Entry