Inventory that originally cost $20,000 was written down to its net realizable value of $18,500 in the last accounting period. At the end of the current accounting period, the net realizable value is determined to be $23,000. At what amount should the inventory be reported on the current period's statement of financial position?
A) $16,000.
B) $18,500.
C) $23,000.
D) $20,000.

Question

Quizplus · Accepted Answer

The inventory should be reported at the lower of cost or net realizable value. Since the original cost ($20,000) is lower than the current net realizable value ($23,000), it should be reported at its original cost of $20,000.

Inventory That Originally Cost $20,000 Was Written Down to Its