discuss the accounting principle or concept that is most relevant to this situation 580435

Westside Copiers has recently been plagued with lackluster sales. The rate of inventory turnover has dropped, and some of the company’s merchandise is gathering dust. At the same time, competition has forced some of Westside’s suppliers to lower the prices that Westside will pay when it replaces its inventory. It is now December 31, 20X7. The current replacement cost of Westside’s ending inventory is $6,800,000, which is far less than Westside paid for the goods, $8,900,000. Before any adjustments at the end of the period, Westside’s Cost of Goods Sold account has a balance of $36,400,000. What accounting action should Westside Copiers take in this situation? Give any journal entry required. At what amount should Westside report Inventory on the balance sheet? At what amount should Westside report Cost of Goods Sold on the income statement? Discuss the accounting principle or concept that is most relevant to this situation.