Roughrider Ltd.(Roughrider)uses the lower of cost and net realizable value rule to value its football equipment inventory.Roughrider defines market as net realizable value.Roughrider's inventory on January 31,2017 had a cost of $1,200,000 and an NRV of $1,125,000.
Required:
a.By how much should Roughrider's inventory be written down?
b.Prepare the journal entry that Roughrider should prepare to record the write-down.
c.What amount should be reported for inventory on Roughrider's January 31,2017 balance sheet?

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The Answer of Roughrider Ltd.(Roughrider)uses the lower of cost and net realizable value rule to value its football equipment inventory.Roughrider defines market as net realizable value.Roughrider's inventory on January 31,2017 had a cost of $1,200,000 and an NRV of $1,125,000.
Required:
a.By how much should Roughrider's inventory be written down?
b.Prepare the journal entry that Roughrider should prepare to record the write-down.
c.What amount should be reported for inventory on Roughrider's January 31,2017 balance sheet?