Pharoah's Gift Shop uses a perpetual inventory system and the FIFO cost formula for valuing inventory. The company is now in the process of comparing the cost of its inventory with its net realizable value. The following data are available at Pharoah's Gift Shop's year end, December 31:

Units

Unit Cost

Net Realizable Value per Unit

98

$9

$7

Clothing

76

20

25

ellery

Greeting cards

43

2

Stuffed toys

54

12

39

(a)

Determine the lower of cost and net realizable value of the ending inventory assuming Pharoah's Gift Shop applies LCNRV on individual items.

Lower of cost and net realizable value

B) Prepare the journal entry required, if any, to record the adjustment from cost to net realizable value. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List debit entry before credit entry.)

Account Titles

Debit

Credit

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