Schoop,Inc.has 100 units in inventory,purchased at $8 per unit.These units have a current market value of $7.The entry to write-down the inventory will include a:

Question

Quizplus · Accepted Answer

Total cost of inventory = Cost per unit × Number of units in inventory
= $8 × 100 units = $800
Total market value of inventory = Market value per unit × Number of units in inventory
= $7 × 100 units = $700
Write-down = Total cost of inventory cost − Total market value of inventory
= $800 − $700 = $100
The entry to record the write-down includes a debit to Cost of Goods Sold and a credit to Inventory for $100.