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At the end of the year, Ray's Repair Service had the following items in inventory:
Required:
a. Determine the amount of ending inventory using the lower of cost or market rule applied to each individual inventory item.
b. Provide the general journal entry necessary to write down the inventory based on Requirement a. Assume that Ray's Repair Service uses the perpetual inventory system.
c. Determine the amount of ending inventory, assuming that the lower of cost or market rule is applied to the total inventory in aggregate.
d. Provide the general journal entry necessary to write down the inventory based on Requirement c. Assume that Ray's Repair Service uses the perpetual inventory system.
e. Explain how the inventory loss would be reported when the periodic inventory system is used.
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