Valuing Inventory at Lower-of-Cost-or-Market Gard Inc. has compiled the following information related to its five products. Costs of disposal are estimated to be 10% of selling price, and gross profit is estimated to be 25% of the selling price. Determine the value of inventory applying the lower-of-cost-or-market rule to each individual inventory item. Note: Round each amount to the nearest dollar. #1 #2 #3 #4 #5 Estimated selling price $660 $760 $820 $1,000 $1,300 Original cost (LIFO) Replacement cost 450 480 600 630 900 500 700 490 660 830 Inventory at the lower-of-cost-or-market $ 450 480 490 x $ 630 $ 900 x Valuing Inventory and Recording Entries Using Relative Sales Value Method AVC Inc. purchased 2,280 bags of pecans that cost $7,980. The company also incurred $570 for transportation and grading. The pecans graded out as follows. Grade Quantity (bags) Current Market Price per Bag A 760 B 1,140 C 190 Waste 190 $6.75 6.00 4.50 Required Assume the relative sales value method is used to allocate lump sum costs. Carry all decimals in calculations; round the final answer to the nearest dollar. a. Prepare the purchase entry assuming a perpetual inventory system. b. Determine the value of ending inventory assuming the following quantities are in inventory: grade A, 190 bags; grade B, 152 bags; and grade C, 76 bags. c. Prepare the entry for sale of 38 bags of grade A pecans at a market price of $6.75 cash per bag. Account Name a. Inventory-Grade A Inventory-Grade B Inventory-Grade C Accounts Payable b. Inventory-Grade A $ Inventory-Grade B Inventory-Grade C Total c. Cash Cost of Goods Sold Sales Inventory Dr. Cr. 3,420 4,560 0 570- 0 8,550 855 608 228 $ 1,691 Account Name Dr. Cr. 256.5 x 0 171 0 0 0 256.5 x 171