(L.OBJ. 5) Applying the lower-of-cost-or-market rule [5—10 min] Assume that a Queen Bur...

(L.OBJ. 5) Applying the lower-of-cost-or-market rule [5—10 min]

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

Requirement

1. At April 30, the accountant for the restaurant determines that the current replacement cost of the ending inventory is $515. 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 April 30?

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