Huron Garden Supplies uses a perpetual inventory system. The company has these account balances at October 31, 2021, prior to making the year-end adjustments: 

A year ago, the net realizable value of ending inventory was $12,800, which exceeded the cost of $10,500. Huron has determined that the net realizable value of the October 31, 2021, ending inventory is $11,000. 

Requirement

Prepare the company’s 2021 income statement through gross profit to show how the company would apply the lower-of-cost-or-market rule to its inventories.

Transcribed Image Text:

Inventory Beg bal 10,500 End bal 15,500 Bal Cost of Goods Sold 73,000 Sales Revenue Bal 119,000