Better Buy has six CD players in inventory on 31 December. The players were purchased in November for $170. The current net realisable value for each of the CD players is $160. The adjustment would have what effect on Gross profit?

Question

Quizplus · Accepted Answer

The net realizable value is lower than the cost, so the inventory must be written down by $10 per CD player. With six players, this results in a $60 decrease in gross profit.

Better Buy Has Six CD Players in Inventory on 31