Which of the following amounts would be reported as Merchandise Inventory on the balance sheet of a company if the cost of an item is $110 and the current replacement cost is $70?

Question

Quizplus · Accepted Answer

Under the lower of cost or market rule, inventory is reported on the balance sheet at the lower of its historical cost or current market value. In this case, since the current replacement cost ($70) is lower than the historical cost ($110), the inventory would be reported at $70.

Which of the Following Amounts Would Be Reported as Merchandise