Inventory Transactions The company would report ending inventory at $ because the FIFO rule requires inventory to be reported in the financial statements at whichever is lower of cost or net realizable value. Account for this difference by preparing the necessary journal entry. (Record debits first, then credits. Explanations are not required.) Assume a Gold Medal Sports outlet store began December 2020 with 49 pairs of water skis that cost the store $33 each. The sale price of these water skis was $68. During December, the store completed these inventory transactions: (Click the icon to view the inventory transactions.) Requirements 1. The preceding data are taken from the store's perpetual inventory records. Which cost method does the store use? Explain how you arrived at your answer. 2. Determine the store's cost of goods sold for December. Also compute gross profit for December. 3. What is the cost of the store's December 31 inventory of water skis? 4. Assume that ending inventory declined by $235. What value would the company report as inventory on the balance sheet? Include in your answer why it chose that value. How would it account for this difference? Requirement 1. Which cost method does the store use? Explain how you arrived at your answer. Gold Medal Sports uses This is apparent from the flow of costs out of inventory. For example, the December 13 sale shows unit cost of , which came from the This is how , and only FIFO, Requirement 2. Determine the store's cost of goods sold for December. Also compute gross profit for December. The cost of goods sold is $ The gross profit for December is Requirement 3. What is the cost of the store's December 31 inventory of water skis? The cost of the company's inventory at December 31 is $ Requirement 4. Assume that ending inventory declined by $235. What value would the company report as inventory on the balance sheet? Include in your answer why it chose that value. How would it account for this difference? The company would report ending inventory at $ because the requires inventory to be reported in the financial statements at