At the beginning of October, Bowser Companys inventory consists of 63 units with a cost per unit of $37. The following transactions occur during the month of October. questions

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.

BOWSER COMPANYMultiple-Step Income Statement (partial)For the Month of OctoberNet Sales$18,720Cost of Goods SoldGross Profit

• Record the cost of inventory sold.

Note: Enter debits before credits.

DateGeneral JournalDebitCreditOctober 22Cost of Goods SoldInventory

October 4Purchase 117 units of inventory on account from Waluigi Company for $50 per unit, terms 2/10, n/30.October 5Pay cash for freight charges related to the October 4 purchase, $485.October 9Return 20 defective units from the October 4 purchase and receipt of credit.October 12Pay Waluigi Company in full.October 15Sell 147 units of inventory to customers on account, $11,760. (Hint: The cost of units sold from the October 4 purchase includes $50 unit cost plus $5 per unit for freight less $1 per unit for the purchase discount, or $54 per unit.)October 19Receive full payment from customers related to the sale on October 15.October 20Purchase 87 units of inventory from Waluigi Company for $57 per unit.October 22Sell 87 units of inventory to customers for cash, $6,960.

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 $31. 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.