Research In Motion Inc. (RIM), which is best known for its wireless communication product, the BlackBerry, disclosed the following information in Note 5 to its annual report:

Inventory is made up of the following:

The provision for excess and obsolete inventory is essentially a write-down of specific inventory items to their net realizable values.
Required:
1. Assume that the write-down relates to the values of specific items of raw materials. Prepare the journal entry to record the write-down of inventory costs. RIM uses a perpetual inventory system.
2. Assume that some of the raw materials that were written down on February 28, 2009, were not used for production purposes by February 27, 2010, the end of its 2010 fiscal year. The inventory items that were written down had an original cost of \(\$ 9,347\) and their net realizable value was \(\$ 7,634\). Changes in market conditions increased the net realizable values of these items to \(\$ 9,563\), which exceeded their original cost. How would this information be reflected in RIM's income statement for fiscal 2010 and its statement of financial position at February 27, 2010? Explain.

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Raw materials Work in process Finished goods Provision for excess and obsolete inventory February 28, 2009 $464,497 250,728 35,264 (68,089) $682,400