Case 5.2: West River Orthopedic Clinic Key concept: Physical inventory and prot effects JWest River Orthopedic Clinic prescribes a variety of medical supplies for the treatment of various patient conditions. Although patients are free to purchase the medical supplies from any supplier they choose, the clinic provides the option of acquiring most of the items from the clinic. Standard markup procedure is to price the supplies at 300 percent of cost. Medical supplies are physically inventoried at the end of each month, and the computer records are adjusted monthly for any discrepancies. After this adjustment, medical supplies are ordered based on a comparison of standard order quantities to supplies on hand. At the end of the fiscal year, a comparison of the computer's perpetual inventory listing of medical supplies on hand to actual supplies per physical inventory revealed the following: Quantity on Quantity on Hand Inventory Average Hand per per Physical Number Description Unit Cost Computer Inventory 10:. Wrist compression support $8 10 7 112 Arm sling $9 12 lo 114 Carpal tunnel wrist support 510 5 4 116 Thumb brace $12 7 6 121 Clavicle support $14 11 10 123 Lumbosacral support 525 15 12 130 Dorsiwedge night splint $72 4 2 Assignments and Questions 1. Compute the ending inventory value per the computer. 2. Compute the ending inventory value per the physical inventory. 3. Which of the two values should appear in the nancial statements? Why? 4. What adjusting entry is needed