At the beginning of October, Bowser Company's inventory consists of 64 units with a cost per unit of $36. The following transactions occur during the month of October.
October 4 Purchase 116 units of inventory on account froe Waluigi Company for $50 per unit, teras 2/10, a/30.
October 5 pay cash for freight chargen related to the oetober 4 purchase, $672.
October 9 Return 20 defective units from the oetober 4 purchane and receipt of credit.
October 12 pay Kaluigi Company in full. October 15 sel1 146 units of inventory to customers on sccount, $11,680. (Nint) The cost of units sold fron the October 4 purchase ineludes $50 unit cost plun $7 per unit for froight losis $1 per unit for the purchase discount, or $56 per unit.)
October 19 Receive full payment from eustomers related to the sale on october 15.
October 20 purehase 86 units of inventory from Waluigi company for $56 per unit.
October 22 sel1 86 units of inventory to eustomors for cash, $6,880.
Required:
1. Assuming that Bowser Company uses a FIFO perpetual inventory system to maintain its inventory records, record the transactions.
2. Suppose by the end of October that the remaining inventory is estimated to have a net realizable value per unit of $30. Record any necessary adjusting entry for lower of cost and net realizable value.
3. Prepare the top section of the multiple-step income statement through gross profit for the month of October after the adjusting entry for lower of cost and net realizable value.