AMC Trade Mart has recently had lacklustre sales. The rate of inventory turnover has dropped, and the merchandise is gathering dust. At the same time, competition has forced AMC's suppliers to lower the prices that AMC will pay when it replaces its inventory. It is now December 31, 2020, and the current net realizable value of AMC's ending inventory is \(\$ 80,000\) below what AMC actually paid for the goods, which was \(\$ 190,000\). Before any adjustments at the end of the period, the Cost of Goods Sold account has a balance of \(\$ 780,000\)

Identify and explain how accounting standards apply to inventory. Include in your answer how the information that is relevant to inventory is reported in AMC's financial statements,