Last Year Bell-Bottom Jeans Were Fashionable and This Year Boot-Cut

Essay

Last year bell-bottom jeans were fashionable and this year boot-cut jeans are.A retail company's inventory has 375 bell-bottom jeans that cost $17 each and could be replaced for $15.The inventory also includes 1,000 boot-cut jeans that cost $16 each and could be replaced for $19.Explain why this situation requires an adjustment to the accounting records,prepare the journal entry that would be used to make the adjustment,and show the effects of the adjustment on the accounting equation.