Inventory that originally cost $11,200 was written down to its net realizable value of $9,400 at the end of 2021.At the end of 2022, the net realizable value is determined to be $11,700.At what amount should the inventory be reported on the December 31, 2022 statement of financial position?
A)$11,700
B)$11,200
C)$9,700
D)$9,400

Question

Quizplus · Accepted Answer

Under the lower of cost or market rule, once inventory is written down, any subsequent recoveries in value are not recognized until the inventory is actually sold. Therefore, the inventory should be reported at its written-down value of $11,200, the original cost, because the recovery exceeds the original cost, and the write-down does not reverse.

Inventory That Originally Cost $11,200 Was Written Down to Its