RoseTree Garden Supplies uses a perpetual inventory system

Subject:AccountingPrice:2.89 Bought3

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RoseTree Garden Supplies uses a perpetual inventory system. RoseTree Garden Supplies has these account balances at August 31, 2014, prior to making the year-end adjustments:

Inventory                                                   Cost of Goods Sold                                  Sales Revenue 

Beg bal 30,000 
End bal 34,000                                               Bal 118,000                                        Bal 251,000

A year ago, the current replacement cost of ending inventory
 was $31,500, which exceeded the cost of $30,000. RoseTree Garden Supplies has determined that the replacement cost of the August 31, 2014, ending inventory is $32,000.

Requirement
1. Prepare RoseTree Garden Supplies€™ 2014 income statement through gross profit to show how the company would apply the lower-of-cost-or-market rule to itsinventories.