Best Deals Inc.has six CD players in ending merchandise inventory on December 31.The players were purchased in November for $170.The price lists from suppliers indicate the current replacement cost of a CD player to be $168.Which of the following statements is true of the effects of the adjustments to ending merchandise inventory on the cost of goods sold?

Question

Quizplus · Accepted Answer

The cost of goods sold would increase by $12 because the inventory is written down to the lower replacement cost, resulting in an increase in cost of goods sold by the difference of $2 per unit for 6 units.