Question
Apple Inc. is evaluating the value of its inventory using the lower of cost or market method. The company purchased inventory items for $500,000, and
Apple Inc. is evaluating the value of its inventory using the lower of cost or market method. The company purchased inventory items for $500,000, and the current market value of these items is $450,000. However, the company's purchasing manager insists that the market value should be adjusted upward to $550,000 based on his assessment of future demand for the inventory items. The company's accountant disagrees and argues that the market value should reflect the current selling price in the ordinary course of business. According to the Objectivity Principle, how should Apple Inc. resolve this disagreement, and what impact would it have on the financial statements?
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