A retailer of portable computers in Sydney Australia by the name of Tough Hardware Pty Ltd discovered that a new competitor had been able to source merchandise from overseas at a much cheaper price than Tough Hardware. The competitor is now selling at retail prices significantly below Tough Hardwares prices. If Tough Hardware is bound by IRFS, it is obliged to

Select one:

a.

write down the value of its inventory in the General Ledger to match the retail prices of the competitor

b.

write down the value of its inventory in the General Ledger to match the retail prices of the competitor less Tough Hardwares applicable unit direct selling costs.

c.

do nothing

d.

leave its inventory costed at purchase cost