Meredith's Appliance Store has the following data for the items in its inventory at the end of the accounting period:

Waymire Company prepared the partial statements of earnings presented below for 2022 and 2021.

	2022					2021
Sales revenue			$538,200					$483,700
Cost of goods sold:
Beginning inventory	$39,300					$32,100
Purchases	343,200					292,700
Cost of goods available for sale	382,500					324,800
Ending inventory	(46,800)		335,700			(39,300)		285,500
Gross margin			202,500					198,200
Operating expenses			(167,200)					(151,600)
Income before taxes			$ 35,300					$ 46,600

During 2023, Waymire's accountant discovered that ending inventory for 2022 had been overstated by $8,200.

Required:

1. Prepare corrected 1. Prepare corrected statements of earnings for 2022 and 2021. for 2022 and 2021. Use the minus sign for negative values.

Waymire Company
Income Statement
For 2022 and 2021
	2022	2022	2021	2021
		$fill in the blank 085b68f92fa3fc2_2		$fill in the blank 085b68f92fa3fc2_3
Cost of goods sold:
	$fill in the blank 085b68f92fa3fc2_5		$fill in the blank 085b68f92fa3fc2_6
	fill in the blank 085b68f92fa3fc2_8		fill in the blank 085b68f92fa3fc2_9
	fill in the blank 085b68f92fa3fc2_11		fill in the blank 085b68f92fa3fc2_12
	fill in the blank 085b68f92fa3fc2_14	fill in the blank 085b68f92fa3fc2_15	fill in the blank 085b68f92fa3fc2_16	fill in the blank 085b68f92fa3fc2_17
Gross margin		fill in the blank 085b68f92fa3fc2_18		fill in the blank 085b68f92fa3fc2_19
		fill in the blank 085b68f92fa3fc2_21		fill in the blank 085b68f92fa3fc2_22
		$fill in the blank 085b68f92fa3fc2_24		$fill in the blank 085b68f92fa3fc2_25

2. Prepare a schedule showing each financial statement item affected by the error and the amount of the error for that item. Indicate whether each error is an overstatement (+) or an understatement (-). If no entry is required, leave the amount box blank.

Waymire Company
Financial Statement
For 2021 and 2022
	2021	2022
Beginning inventory	fill in the blank 8f2d0d03902c02c_1	fill in the blank 8f2d0d03902c02c_2
Ending inventory	fill in the blank 8f2d0d03902c02c_3	fill in the blank 8f2d0d03902c02c_4
Shareholders' equity	fill in the blank 8f2d0d03902c02c_5	fill in the blank 8f2d0d03902c02c_6
Cost of goods sold	fill in the blank 8f2d0d03902c02c_7	fill in the blank 8f2d0d03902c02c_8
Gross margin	fill in the blank 8f2d0d03902c02c_9	fill in the blank 8f2d0d03902c02c_10
Income before taxes	fill in the blank 8f2d0d03902c02c_11	fill in the blank 8f2d0d03902c02c_12

Required:

1. Compute the carrying value of Meredith's ending inventory using the lower of cost and net realizable value (LCNRV) rule applied on an item-by-item basis. $fill in the blank ec44f4fa8fc2fcb_1

2. Prepare the journal entry required to value the inventory at LCNRV.

		fill in the blank 42257bfe4051011_2
			fill in the blank 42257bfe4051011_4
	(Reduced inventory to net realizable)

3. CONCEPTUAL CONNECTION: What is the conceptual justification for valuing inventory at LCNRV?

The input in the box below will not be automatically graded, but may be reviewed and considered by your instructor.