QW EP Garda Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes in northern New Jersey and southern New York. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2020, and Jim Alcide, controller for Garcia, has gathered the following data concerning inventory At May 31, 2020, the balance in Garcia's Raw Material Inventory account was $276,500 and the Allowance to Reduce Inventory to NRV had a credit balance of $11,700 Alcide summarized the relevant inventory cost and market data at May 31, 2020 in the schedule below Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Garcia's May 31, 2020, financial statements for inventory under the lower-of-cost-or-NRV rule as applied to each item in inventory Devereaux expressed concern over departing from the cost principle. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Cost $33,000 89.500 115,000 39,000 $276,500 Replacement Cost $32,500 79.400 124.000 26,000 $281,900 Sales Price $34,000 94,000 186,400 54,800 $360,200 NetRearane Value Value $24.000 83,800 160,300 38.000 $308,100 Normal Profit $2,100 7.400 18,500 5.400 $33,400 Total Instructions: (1) Determine the proper balance in the Allowance to Reduce Inventory to NRV at May 31, 2020. Calculations of Proper Balance on the Allowance to Reduce Inventory to NRV At May 31, 2020 LCNRY Aluminum siding Cedar Shake siding Louvered clase Thermal Windows glass doors Inventory cost LCNRV valuation 1 2 3 4 6 5 Allowance at May 31, 2020 (2) For the fiscal year ended May 31, 2020, determine the amount of the gain or loss that would be recorded due to the change in the Allowance to Reduce Inventory to NRV. Reord the journal entry. Balance prior to adjustment Less: Required balance Loss to be recorded journal entry McGriff requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $87,000 Purchases since January 1 were $239,000 freight-in $8,400 purchase returns and allowances, $7,500. Sales are made at 25% above cost and totaled 350,000 to March 9. Goods costing $14,900 were left undamaged by the fire; remaining goods were destroyed. Instructions (a) Compute the cost of goods destroyed. Beginning Inventory Purchase Purchase return and allowance Freight-in Good available for sale Less: estimated cogs estimated ending inventory salvage good destroyed (b) Compute the cost of goods destroyed, assuming that the gross profit is 25% of sales. Beginning Inventory Purchase Purchase return and allowance Freight-in Good available for sale Less: estimated cogs estimated ending inventory salvage good destroyed The records for the Clothing Department of Sharapova's Discount Store are summarized below for the month of January $87.000 at cost $37.000 at retail Inventory, January 1. 74,000 Purchases in January at cost af retail I Freight-in 7.000 Purchases returns at retail 5.000 2.500 at cost Net markups: 11.800 Net markdowns 10.500 Inventory losses due to normal breakage, etc. af retail at reta 6 00 at retail: 99.000 Sales returns 2.400 Instructions: (a) Compute the inventory for this department as of January 31, at Retail thl Compute the inventory for this department as of January 31, at lower-of-average-cost-or-market Ending inventory at lower of average cost or market