Applying the lower of cost or market rule At August 31, the accountant for Mountain Cycles determines that the current replacement cost of each bike is $40.
Requirements
1. Assuming inventory was calculated using the FIFO method, 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 August 31?
2. Assuming inventory was calculated using the LIFO method, 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 August 31?
3. Assuming inventory was calculated using the average cost method, 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 August 31?