Chapter 9, Problem 4P

To determine

Net realizable value: Net realizable value is defined as the amount from the sale of asset after deducting all expenses related to sale.

(a)

(1)

To determine the Allowance to Reduce Inventory to Market.

To determine

(2)

To determine the amount of the gain or loss for the fiscal year.

To determine

(b)

To justify: To justify the use of the lower-of-cost-or-market rule to inventories.