Trekking Company's cost of inventory was $317,500. Due to phenomenal demand the net realizable value has increased to $323,000. Trekking Company should write up the value of inventory under the LCNRV rule.

Question

Quizplus · Accepted Answer

Under the Lower of Cost or Net Realizable Value (LCNRV) rule, inventory is written down to its net realizable value when the market value falls below its cost, but it is not written up if the market value increases above cost.

Trekking Company's Cost of Inventory Was $317,500