Gladding, Incorporated Applies the Lower-Of-Cost-Or-Market Rule to the Entire Stock

Essay

Gladding, Incorporated applies the lower-of-cost-or-market rule to the entire stock of its inventory in the aggregate. At the end of the accounting period, it is determined that the cost of the inventory is $26,985 and the market (replacement)value is $25,886. Indicate how the required adjustment affects the elements of the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts.Increase = IDecrease = DNot Affected = NA