The Picture Store Has an Ending Inventory of $832,500

Essay

The Picture Store has an ending inventory of $832,500. The current replacement cost of the inventory is $833,000. Before any adjustments at the end of the period, the cost of goods sold account has a balance of $1,508,200.
Required:
1. What journal entry if any, should The Picture Store make?
2. At what amount should The Picture Store report inventory on its balance sheet?
3. At what amount should The Picture Store report cost of goods sold on the income statement?
4. What accounting principle is most relevant to this situation?