Problems 8-37 PROBLEMS P8.1 LO 8.1 Lower of Cost or Market Palmquist Company has five different inventory items that it values by the lower of cost or market rule applied on an individual item basis. The normal markup on all items is 20% of cost. The following in formation is obtained from the company's records: Item Units Cost Replacement Cost Net Realizable Value 500 $10.00 $ 9.10 $ 9.20 2 400 8.00 8.10 7.80 3 300 15.00 13.50 14.00 4 200 18.00 12.00 17.00 100 25.00 25.50 25.30 Required: 1. Assume that Palmquist uses the FIFO cost flow assumption. Compute the correct inventory value under the lower of cost or market rule. 2. Assume that Palmquist uses the LIFO cost flow assumption. Compute the correct inventory value under the lower of cost or market rule. 3. Assume that Palmquist uses IFRS. Compute the correct inventory value under the lower of cost or market rule. 4. Next Level Explain the differences between the inventory valuations reported under IFRS and U.S. GAAP