1. The Hendrix Company sells four products that can be grouped into two major categories. Hendrix uses the FIFO cost flow assumption. Sales commissions and transportation costs average 10% of the selling price. The inventory of Hendrix Company consists of four products as summarized below. Products A and B are in Category 1 and products C and D are in Category 2. Product Cost $ 120,000 175,000 160,000 45,000 Selling Price $ 160,000 180,000 160,000 60,000 a) Apply the LCNRV method and determine at what amount the ending inventory should be reported for each of the following: i. ii. iii. Individual items Major categories Total inventory b) Assume that the above results are for the first year of operations for Hendrix Company. Prepare the journal entry to record the results of applying the LCNRV method. Hendrix uses the loss method and applies the LCNRV based on a total inventory approach. c) Assume that at the end of the next year of operations Hendrix's inventory balance on the financial statements is $550,000. The total NRV of the inventory is $475,000. Prepare the journal entry to record the results of applying the LCNRV method