Inventory that originally cost $10,000 was written down to its net realizable value of $8,500 at the end of 2012. At the end of 2013, the net realizable value is determined to be $10,500. At what amount should the inventory be reported on the December 31, 2013 statement of financial position?
A) $8,500.
B) $10,000.
C) $9,500.
D) $10,500.

Question

Quizplus · Accepted Answer

According to accounting standards, inventory should be reported at the lower of cost or net realizable value. Since the net realizable value at the end of 2013 is $10,500, which is higher than the original cost of $10,000, the inventory should be reported at its original cost of $10,000.

Inventory That Originally Cost $10,000 Was Written Down to Its