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At 12/31/20, the end of Pharoah Company's first year of business, inventory was $7,500 and $4,550 at cost and at market, respectively. Following is data

At 12/31/20, the end of Pharoah Company's first year of business, inventory was $7,500 and $4,550 at cost and at market, respectively. Following is data relative to the 12/31/21 inventory of Jenner: Item Original Cost Per Unit Replacement Cost A $0.55 $0.45 B 0.55 0.50 C 0.85 0.90 D 0.60 0.50 E 0.80 0.75 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 1,400 units of each item in the 12/31/21 inventory. (a) Prepare the entry at 12/31/20 necessary to implement the lower-of-cost-or-market procedure assuming Pharoah uses a contra account for its balance sheet. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 12/31/20?

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