(a) Wahl Company sells three different categories of tools (small, medium, and large). The cost and market value of its inventory of tools are as follows.

Cost Market Value Small $ 64,000 $ 73,000 Medium 290,000 260,000 Large 152,000 149,000 Determine the value of the company’s inventory under the lower-of-cost-or-market approach.

(b) Rhodee Company understated its 2013 ending inventory by $28,000. Determine the impact this error has on ending inventory, cost of goods sold, and stockholders’ equity in 2013 and 2014.