On January 31, the company examines its inventory and finds that it includes seven saddles of the model "MBS Most Beautiful Saddle". Acquisition cost of one of these saddles were 2000$ net of VAT. The company shortly before became aware of the fact that Loesdau GmbH, a well-established competitor of the company seated closely to Munich, reduced its sales price (including 19% VAT) of the MBS model to 1999$.

a) How shall acquired inventory be measured in a balance sheet? Which action should be taken to measure the company's inventory adequately in the balance sheet as per 31 January 2023? Please provide a verbal description and calculate the amounts needed. SHow the way how you calculate explicitly, only providing the calculated amount will not be scored.

b) Please provide relevant journal entries.

Date. Account name. Account type. Amount DEBIT. Amount Credit