Exercise 6-13 (Algo) Calculate inventory using lower of cost and net realizable value (LO6-6)

Office Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory.

Inventory	Quantity	Unit Cost	Unit NRV
Furniture	220	$87	$102
Electronics	52	420	360

Required: 1. Calculate the total recorded cost of ending inventory before any adjustments. 2. Calculate ending inventory using the lower of cost and net realizable value. 3. Record any necessary adjusting entry for inventory. 4. Determine the impact of the adjusting entry in the financial statements.

Explain the impact of the adjusting entry in the financial statements. (Amounts to be deducted should be entered with minus sig \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{ Income Statement: } \\ \hline Revenues & - & Expenses & = & Net Income \\ \hline & & & & \\ \hline & & & & \\ \hline \multicolumn{5}{|c|}{ Balance Sheet: } \\ \hline Assets & = & Liabilities & + & StockholdersEquity \\ \hline & & & & \\ \hline 1 & & & & \\ \hline \end{tabular}