Garcia Company uses FIFO, and its inventory at the end of the year was recorded in its accounting records at $61,800. Due to technological changes in the market, Garcia would be able to replace its inventory for $58,710.

Required:

1. Using the lower of cost or market method, what amount should Garcia report for inventory on its balance sheet at the end of the year? $

2. Prepare the journal entry required to value the inventory at the lower of cost or market.

Dec. 31
	(Inventory adjustment to market value)