Inventory that originally cost $10,000 was written down to its net realizable value of $8,500 in the last accounting period.At the end of the current accounting period,the net realizable value is determined to be $10,500.At what amount should the inventory be reported on the current period's statement of financial position?
A)$10,000.
B)$10,500.
C)$8,500.
D)$9,500.

Question

Quizplus · Accepted Answer

The inventory should be reported at its original cost of $10,000 because the net realizable value has increased above the original cost. Inventory is reported at the lower of cost or net realizable value, and since the net realizable value is now higher than the original cost, the inventory should be reported at its original cost.

Inventory That Originally Cost $10,000 Was Written Down to Its