Nature Foods reports merchandise inventory at the lower-of-cost-or-market. Prior to releasing its financial statements for the year ended May 31, 2025, Nature's preliminary income statement, before the year-end adjustments, appears as follows: (Click the icon to view the preliminary income statement.) Nature has determined that the current replacement cost of ending merchandise inventory is $17,500. Cost is $20,000. Read the requirements. Requirement 1. Journalize the adjusting entry for merchandise inventory, if any is required. (Record debits first, then credits. Select the explanation on the last line of the journal entry. For situations that do not require an entry, make sure to select "No entry required" in the first cell in the "Accounts" column and leave all other cells blank.) Date May 31 Requirements Accounts and Explanation Debit 1. Journalize the adjusting entry for merchandise inventory, if any is required. 2. Prepare a revised partial income statement to show how Nature Foods should report sales, cost of goods sold, and gross profit. Print Done Credit - Data table Nature Foods Income Statement (Partial) Year Ended May 31, 2025 Net Sales Revenue $ 122,000 45,000 Cost of Goods Sold $ 77,000 Gross Profit - X