(Learning Objective 3: Applying the net realizable value to inventories) Green Garden Supplies uses a perpetual inventory system. Green Garden Supplies has these account balances at May 31, 20X6, prior to making the year-end adjustments:

A year ago, the NRV cost of ending inventory was €13,400, which exceeded the cost of

€12,500. Ontario Garden Supplies has determined that the NRV cost of the May 31, 20X6, ending inventory is €13,000.

❙ Requirement 1. Prepare Green Garden Supplies’ 20X6 income statement through gross profi t to show how the company would apply the net realizable value to its inventories.