Trekking Company has inventory with a net realizable value of $217,000 and a cost of $241,000. According to the guidance provided by the principle of faithful representation, the inventory should be written down to $217,000.

Question

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According to the principle of faithful representation, assets should be reported at their net realizable value, which is $217,000 in this case. Therefore, the inventory should be written down to this amount to accurately reflect its value on the balance sheet.

Trekking Company Has Inventory with a Net Realizable Value of $217,000