$---$Without prejudice to the inventory section of Maddox's balance sheet as of November $30,2025,$ assume that the NRV of Maddox's inventories is less than cost. Explain how this decline would be presented in Maddox's income statement for the fiscal year ended November $30,2025.$

$--$Assume that Maddox has a firm purchase commitment for the same type of derailleur included in the raw materials inventory as of November $30,2025,$ and that the purchase commitment is at a contracted price $15\%$ greater than the current market price. These derailleurs are to be delivered to Maddox after November $30,2025.$ Discuss the impact, if any, that this purchase commitment would have on Maddox's financial statements prepared for the fiscal year ended November $30,2025.$