Q8. (6 points) Please use your own words to answer the following questions. (1) Why do companies record the adjusting entries before preparing the financial statements? (2) AML Company purchased an item for inventory that cost $30 per unit and was priced to sell at $50. It was determined that the replacement cost is $24 per unit. Using the lower of cost or market rule, what amount should be reported on the balance sheet for inventory? Which accounting principle does this lower of cost or market rule reflect? (3) The shareholders would always want the firm's current ratio to be as high as possible. Is this statement correct? Why