Cordon Garden Supplies uses a perpetual inventory system. Cordon Garden Supplies has these account balances at March 31, 2016, prior to making the year and adjustments. A year ago, the replacement cost of ending inventory was exist13,000, which exceeded the cost of exist11,000 Gordon Garden Supplies has determined that the replacement cost of the March 31, 2016, ending inventory is exist12,000 Requirement 1. Prepare Gordon Garden Supplies 2016 income statement through gross profit to show how the company would apply the lower of cost or market rule to its inventories