Calculating Lower-of-Cost-or-Net Realizable Value Traylor Inc. has the following information for its six inventory items on June 30. Determine the inventory cost to report on the balance sheet on June 30 assuming that the company applies the lower-ofcost-or-net realizable value rule to each individual inventory item. Estimating Inventory Using Gross Profit Method The following data are available from a company for the current year. Required For each separate case a through e, estimate ending inventory. Note: Carry all decimals in calculations; round the final answer to the nearest dollar. Recording Entry and Determining Effect on Net Income for Change in Accounting Principle Sterling Co. changed from FIFO to average cost on January 1 of Year 3. Inventory balances on December 31 under both methods follow for the prior two year-ends. Sterling Co. has a December 31 yearend. a. Prepare the entry on January 1 of Year 3 to record the accounting change. Ignore taxes. - Note: If a journal entry isn't required on any of the dates shown, select "N/A-debit" and "N/A-credit" as the account names and leave the Dr. and Cr. answers blank (zero). b. Determine how the company's Year 2 income is impacted when retroactively adjusted for the change in accounting principle. Ignore taxes. - Note: Do not use a negative sign with your answer. Net income will $