At 12/31/17, the end of Jenner Company's first year of business, inventory was $4,100 and $2,800 at cost and at market, respectively.

Following is data relative to the 12/31/18 inventory of Jenner:

Original Appropriate

Cost Selling Disposal Inventory

Item Per Unit Price Cost NRV Value

A $ .65 $ 1.00

B .45 1.00

C .70 1.00

D .75 1.00

E .90 1.00

Selling price is $1.00/unit for all items. Disposal costs amount to 10% of selling price and a "normal" profit is 30% of selling price. There are 1,000 units of each item in the 12/31/18 inventory.

Instructions

(a) Prepare the entry at 12/31/17 necessary to implement the lower-of-cost-or-market procedure assuming Jenner uses a contra account for its balance sheet.

(b) Complete the last three columns in the 12/31/18 schedule above based upon the lower-of-cost-or-NRV rules.

(c) Prepare the entry(ies) necessary at 12/31/18 based on the data above.