Valuing Inventory at Lower of Cost or Market Management of Tarry Company reports the following inventory using LIFO and applies the lower of cost or market rule. - Edgers: 1,680 units in inventory; cost is $22 each; replacement cost 15$16 each; estimated sale price is $30 each; estimated distribution cost is $3 each; and normal profit is 10% of sale price. - Clippers: 1,120 units in inventory; cost 15$50 each; replacement cost is $36 each; estimated sale price is $90 each: estimated distribution cost is $28 each; and normal profit is 20%6 of sale price. Required a. Determine the inventory cost to report on the balance sheet assuming that the company applies the lower of cost or market rule to each inventory item. b. Prepare the journal entry to apply the lower of cost or market rule to inventory assuming that the company adjusts inventory directly and adjusts equity through cost of goods sold