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Question 1 Mary's Nursery uses a perpetual inventory system. At December 31, the...

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Accounting

Question 1
Mary's Nursery uses a perpetual inventory system. At December 31, the perpetual inventory records
indicate the following quantities of a particular blue spruce tree.
A year-end physical inventory, however, shows only 310 of these trees on hand.
In its financial statements, Mary's Nursery value its inventories at the lower-of-cost-or-market. At
year end, the per unit replacement cost of this tree is $40.(Use $3,500 as the "level of materiality" in
deciding whether to debit losses to Cost of Goods Sold or to a separate loss account.)
Required:
Prepare the journal entries required to adjust the inventory records at year-end, assuming that
Mary's Nursery uses (1) Average cost, (2) Last in First out.
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