E4.25 a) Prepare a comparative summary of your answers to exercises 4.19 through 4.24 using an exhibit similar to exhibit 4.5 in the text, showing the impact of each of the approaches to inventory accounting on the income statement and the statement of financial position. b) Describe the differences in the various methods of accounting for inventory in periods of rising and falling prices. c) If LIFO is used on a company's federal tax return, how does this impact financial reporting under U.S. GAAP? d) Are there any limitations under international financial reporting standards on the use of inventory accounting methods? E4.26 Jones Furniture Company paid $500,000 for inventory held at year end. The replacement cost of this inventory was $496,000. The inventory could be sold for $502,000 and the disposal costs would be $2,000. Normal profit on the sale of this inventory is $5,000. (Use U.S. generally accepted accounting principles (GAAP) to answer items "a" through "e" below.) a) Inventory must be carried at the lower of its original historical cost or its market value. What is the market value of this inventory? b) What is the lower of cost or market value for this inventory? c) Prepare the entry needed, if any, to write down this inventory to market value. d) What entry would be needed, if any, to write down inventory to lower of cost or market under international financial reporting standards (IFRS)? 0888) 101 E4.27 Jones Furniture Company paid $500,000 for inventory held at year end. The replacement cost of this inventory was $496,000. The inventory could be sold for $502,000 and the disposal costs would be $7,000. Normal profit on the sale of this inventory is $5,000. (Use U.S. generally accepted accounting principles (GAAP) to answer items "a" through "c" below) a) Inventory must be carried at the lower of its original historical cost or its market value. What is the market value of this inventory? b) What is the lower of cost or market value for this inventory! c) Prepare the entry needed, if any, to write down this inventory to market value. d) What entry would be needed, if any, to write down inventory to lower of cost or market under international financial reporting standards (IFRS)