Lower-of-Cost-or-Market Adjustment In 2006, Pondo Inc. sold inventory costing $60,000 to its subsidiary for $70,000. At the end of 2006, the subsidiary recorded a lower-of- cost-or-market ad¬

justment relating to this inventory, 60% of which had been sold during 2006.

Determine the amount at which the inventory should be reported in consolidation, assuming that the adjustment was 1. $3,000.

2. $6,000.