A local Chevrolet dealership carries the following types of vehicles:

Because of recent increases in gasoline prices, the car dealership has noticed a reduced demand for its SUVs, vans, and trucks.

		Unit			Unit
Inventory Items	Quantity	Cost			NRV
Vans	2	$	26,000		$	24,000
Trucks	5		17,800			16,800
2-door sedans	1		12,800			14,800
4-door sedans	6		16,800			19,800
Sports cars	2		36,000			39,000
SUVs	7		29,600			27,000

1. Compute the total cost of the entire inventory.

2. Determine whether each inventory item would be reported at cost or net realizable value (NRV). Enter the amount of either the Unit Cost or Unit NRV in the "Lower of Cost and NRV per unit" column and then multiply this amount by the quantity of each inventory item and enter it in the Total column.

Inventory Items	Cost or NRV	Lower of Cost and NRV per unit	Total
Vans
Trucks
2-door sedans
4-door sedans
Sports cars
SUVs
Total			$0

3. Prepare necessary entry to write down inventory from cost to net realizable value. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

4. The write-down of inventory from cost to net realizable value reduces total assets and increases total expenses, leading to lower net income and lower retained earnings.