Required Information [The following information applies to the questions displayed below.] Companles that use FIFO, average cost, or any other method besides LIFO or the retall Inventory method report Inventory at the lower of cost or net realizable value (NRV). Net realizable value Is selling prlce less costs to sell. Companies that use LIFO or the retall Inventory method report Inventory at the lower of cost or market. Market equals replacement cost, except that market should not (a) be greater than NRV (celling) or (b) be less than NRV minus an approxImately normal profit margin (fioor). Knowledge Check 01 At the end of the year, Inventory has a cost of $200,000 and a net realizable value of $195,000 due to normal business circumstances. Prepare the year-end adjusting entry, If any, for Inventory using the lower of cost or net realizable value approach. (If no entry is requlred for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet Record the entry for year end adjustment of inventory. Nate: Entar debits before cred ts