Valley Source Foods reports merchandise inventory at the lower-of-cost-or-market. Prior to releasing its financial statements for the year ended August 31, 2025, Valley Source's preliminary income statement, before the year-end adjustments, appears as follows: (Click the icon to view the preliminary income statement.) Valley Source has determined that the current replacement cost of ending merchandise inventory is $20,500. Cost is $25,000 Read the requirements. Requirement 1. Joumalize the adjusting entry for merchandise inventory, if any is required. (Record debits first, then credits. Select the explanation on the last line of the journal entry. 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.) Date Accounts and Explanation Debit Credit Aug 31 x i Data Table Valley Source Foods Income Statement (Partial) Year Ended August 31, 2025 Net Sales Revenue $ 121,000 48,000 Cost of Goods Sold $ 73,000 Gross Profit Print Done require an entry make sure to select "No entre recuired" in the first cell in the "Accounts" @ Requirements X 1. Journalize the adjusting entry for merchandise inventory, if any is required. 2. Prepare a revised partial income statement to show how Valley Source Foods should report sales, cost of goods sold, and gross profit. Print Done