Year 6 is the first year of operation for Bob the Builder. The
following information is available for Bob's inventories:
December 31, Year 6:
At
cost: $585,000;
At lower of cost and net
realizable value (NRV): $525,000
December 31, Year 7:
At cost: $780,000;
At lower of cost and net
realizable value (NRV): $740,000
Prepare Bob's Year 7 journal entry to adjust
its inventory from cost to the lower of cost and NRV, assuming the
allowance method is being used.