Applying the lower-of-cost-or-market ruleAssume that a Rocket Burger restaurant has the fo...

Applying the lower-of-cost-or-market rule

Assume that a Rocket Burger restaurant has the following perpetual inventory record for hamburger patties:

Requirements

1. At February 28, the accountant for the restaurant determines that the current replacement cost of the ending inventory is $447. Make any adjusting entry needed to apply the lower-of-cost-or-market rule. Inventory would be reported on the balance sheet at what value on February 28?

---

2. Inventory would be reported on the balance sheet at what value if Rocket uses the average-cost method?