Lower-of-Cost-or-Market Glenn Corporation recognized a $17,000 loss on the decline in value of its inventory at December 31, 2001. During 2001, Glenn Corporation purchased inventory costing $374,000 and recorded cost of goods sold at $412,000. Glenn had reported inventory of

$94,000 at December 31, 2000.

a. What was the carrying value of Glenn’s inventory prior to recognizing the loss?

b. What was the carrying value of Glenn’s inventory after recognizing the loss?

c. If Glenn Corporation had failed to recognize the loss at December 31, 2001:

1. Would its inventory be understated or overstated at December 31, 2001?

2. Would its net income for 2001 be understated or overstated?

3. And the inventory on hand at December 31, 2001, is sold in 2002, would net income for 2002 be understated or overstated?