Kincaid Camera Shop applies the lower-of-cost-or-market rule to individual items of inventory. During the year, some of Kincaid's inventory items decreased in market value due to obsolescence. Other items increased in market value during the year. In total, the market value of Kincaid's inventory was higher at the end of the year than the cost of the inventory. Would Kincaid have an adjustment to make at the end of the year due to the lower-of-cost-or-market rule? Why or why not? Would the answer be any different if Kincaid applied the rule to the entire stock of inventory in the aggregate rather than to individual items?

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The Answer of Kincaid Camera Shop applies the lower-of-cost-or-market rule to individual items of inventory. During the year, some of Kincaid's inventory items decreased in market value due to obsolescence. Other items increased in market value during the year. In total, the market value of Kincaid's inventory was higher at the end of the year than the cost of the inventory. Would Kincaid have an adjustment to make at the end of the year due to the lower-of-cost-or-market rule? Why or why not? Would the answer be any different if Kincaid applied the rule to the entire stock of inventory in the aggregate rather than to individual items?

Kincaid Camera Shop Applies the Lower-Of-Cost-Or-Market Rule to Individual Items