The following information pertains to Hagen Metal Work's ending inventory for the current year: Item D M Quantity 150 140 48 29 Unit Cost $ 14 16 12 9 Unit Market Value $ 12 14 13 14 Required a. Determine the value of the ending inventory using the lower-of-cost-or-market rule applied to (1) each individual inventory item and (2) the inventory in aggregate. Ending Inventory Individual item method Aggregate method b. Prepare any necessary journal entries, assuming the decline in value is immaterial, using the (1) individual method and (2) aggregate method. Hagen Metal Works uses the perpetual inventory system. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Exercise 5-1A Effect of inventory cost flow assumption on financial statements LO 5-1 For each of the following situations, select whether FIFO, LIFO, or weighted average cost flow method is used. a. In a period of falling prices, net income would be highest In a period of falling prices, the unit cost of goods would be the same for ending inventory and cost of goods sold. c. In a period of rising prices, net income would be highest d. In a period of rising prices, cost of goods sold would be highest. e. In a period of rising prices, ending inventory would be highest The ending inventory for Carver Co. was incorrectly adjusted, which caused it to be understated by $15,300 for Year 2. Required Was each of the following amounts overstated, understated, or not affected by the error? (Select "NA" for not affected by the error.) Item No. Year Effect 1. 2. 3. 5. 6. Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Amount Affected Beginning inventory Purchases Goods available for sale Cost of goods sold Gross margin Net income Beginning inventory Purchases Goods available for sale Cost of goods sold Gross margin Not income 7 8. 9 10. 11 12