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Trends by Tabitha sells highend leather purses. The company has the following inventory transactions for the year.
Date Transactions Units Unit Cost Total Cost
January Beginning inventory $ $
April Purchase
October Purchase
$
January to December Sales
Because trends in purses change frequently, Trends by Tabitha estimates that the remaining nine purses have a net realizable value at December of only $ each.
a Determine the amount of ending inventory to report using lower of cost and net realizable value under FIFO.
b Record any necessary adjusting entry under FIFO.
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