At the beginning of October, Bowser Companys inventory consists of 52 units with a cost per unit of $48. The following transactions occur during the month of October.

October 4			Purchase 128 units of inventory on account from Waluigi Company for $50 per unit, terms 2/10, n/30.
October 5			Pay cash for freight charges related to the October 4 purchase, $826.
October 9			Return 10 defective units from the October 4 purchase and receipt of credit.
October 12			Pay Waluigi Company in full.
October 15			Sell 158 units of inventory to customers on account, $12,640. (Hint: The cost of units sold from the October 4 purchase includes $50 unit cost plus $7 per unit for freight less $1 per unit for the purchase discount, or $56 per unit.)
October 19			Receive full payment from customers related to the sale on October 15.
October 20			Purchase 98 units of inventory from Waluigi Company for $68 per unit.
October 22			Sell 98 units of inventory to customers for cash, $7,840.

Required:

1. Assuming that Bowser Company uses a FIFO perpetual inventory system to maintain its inventory records, record the transactions. 2. Suppose by the end of October that the remaining inventory is estimated to have a net realizable value per unit of $35. Record any necessary adjusting entry for lower of cost and net realizable value. 3. Prepare the top section of the multiple-step income statement through gross profit for the month of October after the adjusting entry for lower of cost and net realizable value.