Mason Tractor had their yard broken into and vandals damaged 5 tractors which originally cost $125,000 each with an original sales price of $180,000 each. The cost to repair each tractor is estimated to be $14,700, and the new selling price after the repair is estimated to be $105,000 each. Mason pays a 6% commission to its sales reps based on the selling price.

Required:

a. Determine the net realizable value to be assigned to each damaged tractor.

b. Assume that Mason Tractor segregates damaged inventory into a separate account. Provide the required journal entry.

(This is the entire question; No additional data i.e. graph, table, etc... Question from Textbook)