Wire SolutionsCompany's income statement for the month ended August31, 2020, reported the followingdata:

Income Statement:

Sales Rev. 420 000

COGS:

Beginning Inventory 94 000

Net Purchases 243 700

COGS available for sale 337 700

Less: Ending Inventory 113 000

COGS 224 700

Gross Margin 195 300

Before the financial statements werereleased, it was discovered that the current net realizable value of ending inventory was $105,000.

Required.

1. Journalize the entry to apply thelower-of-cost-and-net-realizable-value rule to the inventory.
2. Prepare a revised income statement to adjust the preceding income statement to apply thelower-of-cost-and-net-realizable-value rule to Wire SolutionsCompany's inventory.
3. What is the inventory balance that would be reported on the Wire SolutionsCompany's balancesheet? How would it bereported?