Refer to the information provided in RE8-4. If Paul Corporation’s inventory at January 1, 2019, had a cost and net realizable value of $300,000, prepare the journal entry to record the reductions to NRV assuming that Paul uses a periodic inventory system and the direct method.

RE8-4

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Retail Cost $ 35,000 $ 92,000 Beginning inventory Purchases Net additional markups Net markdowns Goods available for sale 75,000 200,000 15,000 (22,000) $ 285,000 (178,000) $ 107,000 $110,000 Sales Ending inventory at retail