Home Furnishings reports inventory using the lower-of-cost-or-market method. Below is information related to its year-end inventory. Inventory

Question:

Home Furnishings reports inventory using the lower-of-cost-or-market method. Below is information related to its year-end inventory.
Inventory Quantity Cost Market
Furniture..........100...........$ 75..................$ 90
Electronics..........40............300..................250
Required:
1. Calculate under lower-of-cost-or-market.
2. Record any necessary adjustment to inventory.
3. Explain the impact of the adjustment in the financial statements.
Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...