Late in the year, Software City began carrying WordCrafter, a new word processing software program. At December 31, Software City's perpetual inventory records included the following cost layers in its inventory of WordCrafter programs. Purchase Date Nov. 14 Dec. 12 Total available for sale at Dec. 31 Quantity Unit Cost 8 24 $ 410 $ 350 Total Cost $ 3,280 32 8,400 $11,680 a. At December 31, Software City takes a physical inventory and finds that all 32 units of WordCrafter are on hand. However, the current replacement cost (wholesale price) of this product is only $260 per unit. 1. Prepare the entries to record this write-down of the inventory to the lower-of-cost-or-market at December 31. (Company policy is to charge LCM adjustments of less than $2,000 to Cost of Goods Sold and larger amounts to a separate loss account.) 2. Prepare the entries to record the cash sale of 26 WordCrafter programs on January 9, at a retail price of $300 each. Assume that Software City uses the FIFO flow assumption. b. Now assume that the current replacement cost of the WordCrafter programs is $410 each. A physical inventory finds only 30 of these programs on hand at December 31. (For this part, return to the original information and ignore what you did in part a.) 1. Prepare the journal entry to record the shrinkage loss assuming that Software City uses the FIFO flow assumption. 2. Prepare the journal entry to record the shrinkage loss assuming that Software City uses the LIFO flow assumption. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B1 Req B2 Show less Prepare the entries to record this write-down of the inventory to the lower-of-cost-or-market at December 31. (Company policy is to charge LCM adjustments of less than $2,000 to Cost of Goods Sold and larger amounts to a separate loss account.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the inventory write down of 32 units of WordCrafter to the lower-of- cost-or-market. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req A1 Reg A2 Req B1 Req B2 Show less Prepare the entries to record the cash sale of 26 WordCrafter programs on January 9, at a retail price of $300 each. Assume that Software City uses the FIFO flow assumption. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 Record the cash sale of 26 WordCrafter programs at $300 each. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry View general journal Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B1 Req B2 Show less Prepare the journal entry to record the shrinkage loss assuming that Software City uses the FIFO flow assumption. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the shrinkage loss of 2 unit(s) of WordCrafter software using the FIFO flow assumption. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry View general journal Req A1 Req A2 Req B1 Req B2 Prepare the journal entry to record the shrinkage loss assuming that Software City uses the LIFO flow assumption. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the shrinkage loss of 2 units of WordCrafter software using the LIFO flow assumption. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record entry Clear entry View general journal