Tasty's Chocolate Store paid $7,000 for Easter Egg inventory on March 15th. By April 30th (2 weeks after Easter), the seasonal inventory can only be sold to customers for $3,500, and the decline in value appears permanent. In order to sell the inventory quickly, an on line advertisement must be taken out for $1000 other wise it is unlikely they will sell the Easter Eggs at all.

(a) Prepare the required Journal Entry for the above situation at April 30th

(b) Explain why Accounting Principles require you to make this Journal Entry