Pauline€™s Plumbing sells kitchen sinks. The company had the following inventory quantities, per unit costs, and per unit market values (current replacement costs) at the end of a recent fiscal year.

Required:
(a) Compute Pauline€™s Plumbing€™s ending inventory by applying the lower-of-cost-or-market rule on an item-by-item basis.
(b) Briefly describes how the application of the LCM rule will affect the financial statement data of Pauline€™s Plumbing.
(c) In your view, which of the following inventory valuation methods would provide the most relevant and reliable accounting data for external decision makers:
(1) Valuing inventories strictly on a cost basis.
(2) Valuing inventories strictly on a market basis.
(3) Valuing inventories on a lower-of-cost-or-market basis? Defend your choice.

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Per Unit Cost Per Unit Market Value # of Units Industrial tem A tem B Household Item C Item D Utility tem E Item F 100 150 $%160 200 $150 205 75 110 120 140 125 125 80 130 80 80 75 70