Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single$-$family

homes and condominium complexes in northern New Jersey and southern New York. The company is in the process of

preparing its annual financial statements for the fiscal year ended May $31,2022,$ and Jim Alcide, controller for Garcia, has

gathered the following data concerning inventory.

At May $31,2023,$ the balance in Garcia's Raw Material Inventory account was

and the Allowance to Reduce Inventory to NRV had a credit balance of

$$273,000$

$$6,000$

Alcide summarized the relevant inventory cost and market data at May $31,2023,$ in the schedule below.

Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear

on Garcia's May $31,2023,$ financial statements for inventory under the lower$-$of$-$cost$-$or$-$NRV rule as applied to each item

in inventory. Devereaux expressed concern over departing from the cost principle.

Instructions:

$(1)$ Determine the proper balance in the Allowance to Reduce Inventory to NRV at May $31,2023.$

Calculations of Proper Balance on the Allowance to Reduce Inventory to NRV At May $31,2023.$

$(2)$ For the fiscal year ended May $31,2023,$ determine the amount of the gain or loss that would be recorded due

to the change in the Allowance to Reduce Inventory to NRV$.$ Reord the journal entry.

journal entry

$(3)$Calcualte the loss if the adopt LCNRV based on the whole inventory.