Englehart Company sells two types of pumps One is large

Englehart Company sells two types of pumps. One is large and is for commercial use. The other
is smaller and is used in residential swimming pools. The following inventory data is available
for the month of March.In addition to the above information, due to a downturn in the economy
that has hit Englehart’s commercial customers especially hard, Englehart expects commercial
pump prices from March 31 onward to be considerably different (and lower) than at the
beginning of and during March. Englehart has developed the following additional
information.The normal profit margin is 16.67 percent of cost. Englehart uses the FIFO
accounting method.Accounting(a) Determine the dollar amount that Englehart should report on
its March 31 balance sheet for inventory. Assume Englehart applies lower-of-cost-or-market at
the individual product level.(b) Repeat part (a) but assume Englehart applies lower-of-cost-or-
market at the major category level. Englehart places both commercial and residential pumps
into the same (and only) category.AnalysisWhich of the two approaches above (individual
product level or major categories) for applying LCM do you think gives the financial statement
reader better information?PrinciplesAssume that during April, the replacement cost of
commercial pumps rebounds to $1,050 (assume this will be designated market value).(a) Briefly
describe how Englehart will report in its April financial statements the inventory remaining from
March 31.(b) Briefly describe the conceptual trade-offs inherent in the accounting in part(a).
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Englehart Company sells two types of pumps One is large
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