P8.4 (LO 2) Excel (Lower-of-Cost-or-Market) Referring to the situation in P8.2 for Garcia Home Improvement Company, consider the following expanded data at May 31, 2025. Assume Garcia uses LIFO inventory costing. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total Cost $ 70,000 86,000 112,000 140,000 $408,000 Replacement Cost $ 62,500 79,400 124,000 126,000 $391,900 Sales Price $ 64,000 94,000 186,400 154,800 $499,200 Net Realizable Value $ 56,000 84,800 168,300 140,000 $449,100 Normal Profit $ 5,100 7,400 18,500 15,400 $46,400 Instructions a. 1. Determine the write-down, if any, at May 31, 2025. 2. For the fiscal year ended May 31, 2025 prepare the entry to record the decline in inventory to market, if any. b. Explain the rationale for the use of the lower-of-cost-or-market rule as it applies to inventories. (CMA adapted)

P8.4 (LO 2) Excel (Lower-of-Cost-or-Market) Referring to the situation in P8.2 for Garcia Home Improvement Company, consider theffollowing expanded data at May 31, 2025. Assume Garcia uses LIFO inventory costing. Instructions a. 1. Determine the write-down, if any, at May 31, 2025. 2. For the fiscal year ended May 31, 2025 prepare the entry to record the decline in inventory to market, if any. b. Explain the rationale for the use of the lower-of-cost-or-market rule as it applies to inventories. (CMA adapted)