Inventory that originally cost $10,000 was written down to its net realizable value of $8,500 at the end of 2011. At the end of 2012, the net realizable value is determined to be $10,500. At what amount should the inventory be reported on the December 31, 2012 statement of financial position?
A)$10,500
B)$10,000
C)$9,500
D)$8,500

Question

Quizplus · Accepted Answer

The inventory should be reported at the lower of cost or net realizable value. Since the original cost was $10,000 and the net realizable value at the end of 2012 is $10,500, the inventory should be reported at its original cost of $10,000.

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