Record transactions using a perpetual system, prepare a partial income statement, and adjust for the lower of cost and net realizable value $($

L$06-2,$

P$6-6$A At the beginning of October, Bowser Co$.\text{'}$s inventory consists of $50$ units with a cost per unit of $$50.$ The following transactions

occur during the month of October.

October $4$ Purchase $130$ units of inventory on account from Waluigi Co$.$ for $$50$ per unit, terms $2/10,$ n$/30.$

October $5$ Pay cash for freight charges related to the October $4$ purchase, $$600.$

October $9$ Return $10$ defective units from the October $4$ purchase and receive credit.

October $12$ Pay Waluigi Co$.$ in full.

October $15$ Sell $160$ units of inventory to customers on account, $$12,800.($Hint: The cost of units sold from the October $4$ purchase

includes $$50$ unit cost plus $$5$ per unit for freight less $$1$ per unit for the purchase discount, or $$54$ per unit.$)$

October $19$ Receive full payment from customers related to the sale on October $15.$

October $20$ Purchase $100$ units of inventory from Waluigi Co$.$ for $$70$ per unit.

October $22$ Sell $100$ units of inventory to customers for cash, $$8,000.$

Required:

Assuming that Bowser Co$.$ uses a FIFO perpetual inventory system to maintain its inventory records, record the transactions.

Suppose by the end of October that the remaining inventory is estimated to have a net realizable value per unit of $$35.$ Record any

necessary adjusting entry for lower of cost and net realizable value.

Prepare the top section of the multiple$-$step income statement through gross profit for the month of October after the adjusting entry for

lower of cost and net realizable value.