King Camera Shop applies the lower-of-cost-or-market rule to individual items of inventory. In 2013, some of King's inventory lost value due to obsolescence. Other items increased in market value. In total, the market value of King's inventory was higher at the end of 2013 than the cost of the inventory. Would King have an adjustment to make at the end of 2013 due to the lower-of-cost-or-market rule? Would the answer be any different if King applied the rule in aggregate rather than to individual items?

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The Answer of King Camera Shop applies the lower-of-cost-or-market rule to individual items of inventory. In 2013, some of King's inventory lost value due to obsolescence. Other items increased in market value. In total, the market value of King's inventory was higher at the end of 2013 than the cost of the inventory. Would King have an adjustment to make at the end of 2013 due to the lower-of-cost-or-market rule? Would the answer be any different if King applied the rule in aggregate rather than to individual items?

King Camera Shop Applies the Lower-Of-Cost-Or-Market Rule to Individual Items