Some of L and K Electronics' merchandise is gathering dust. It is now December 31, 2024, and the current replacement cost of the ending merchandise inventory is $32,000 below the business's cost of the goods, which was $98,000. Before any adjustments at the end of the period, the company's Cost of Goods Sold account has a balance of $410,000.

Read the requirements

Requirement 1. Journalize any required entries. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. For situations that do not require an entry, make sure to select "No Entry Required" in the first cell in the "Accounts" column and leave all other cells blank.)

The required journal entry would be:

Date	Accounts and Explanation	Debit	Credit
Dec. 31	Cost of Goods Sold	32,000
	Merchandise Inventory		32,000
	To write merchandise inventory down to market value.

Requirement 2. At what amount should the company report merchandise inventory on the balance sheet?

L and K should report merchandise inventory on the balance sheet at

$66,000

Requirement 3. At what amount should the company report cost of goods sold on the income statement?

L and K should report cost of goods sold on the income statement at

?

.