(Learning Objective 3: Applying the Net Realizable Value to inventory) It is December 31, end of the year, and the controller of Reed Corporation is applying the Net Realizable Value (NRV) to inventories. Before any year-end adjustments Reed reports the following data:

■ writing assignment Reed determines that the NRV of ending inventory is $42,000. Show what Reed should report for ending inventory and for cost of goods sold. Identify the fi nancial statement where each item appears.