You are auditing Marthas Prison Clothes, Inc., as of December 31, 2014. The inventory for orange jumpsuits shows 1,263 suits at $782 for a total of $987,666. When you look at the invoices for the jumpsuits, you see the following:

Inventory Number	Date	Quantity		Unit Price		Total
12732	11/22/13	1,000	$	765	$	765,000
12844	12/03/13	800		777		621,600
12905	12/28/13	600		782		469,200

Required:

a.

Determine the adjusting entry, if any, for the cost of inventory at December 31, 2014.

b. If yes, determine the adjusting entry.