Cost per unit : $3.63

replacement cost : $3.34

Estimated selling price: $4.80

Cost of completion and disposal: $1.94

Normal profit margin (%) of selling price: 18%

Estimated Selling price - Costs of completion and disposal = NRV

$4.80 - $1.94 = $3.86

Sale price of inventory x Profit Margin (%)

$4.80 x 18% = 0.864

NRV - the Normal Profit Margin

$3.86 - 0.864 = 1.996

Replacement cost = $3.34

Question: What would be the journal entry for December 31 2017 and why?