The Following Information Pertains to Inventory Held by a Company

The following information pertains to inventory held by a company on December 31, 2011. $$\begin{array} { l r } \text { Historical cost } & \$ 30,000 \\\text { Replacement cost } & \$ 20,000 \\\text { Net realizable value } & \$ 27,000 \\\text { Normal profit margin } & 20 \%\end{array}$$
-What amount of inventory should be reported under U.S. GAAP?

A) $16,000.
B) $27,000.
C) $30,000.
D) $21,600.
E) $20,000. Under U.S. GAAP the inventory is reported at the lower of cost or market where market is defined as replacement cost subject to ceiling and floor limitations.