Question
Freds Outlet Super Store paid $25,500 for inventory (historical cost). At year-end, this inventory had a replacement cost of $24,000, a net realizable value of
Fred’s Outlet Super Store paid $25,500 for inventory (historical cost). At year-end, this inventory had a replacement cost of $24,000, a net realizable value of $26,000 (selling price $28,000 minus disposal costs $2,000), and a net realizable value minus a normal profit of $23,000 (net realizable value $26,000 minus normal profit $3,000).
What is the amount of inventory write-down required by U.S. generally accepted accounting principles (U.S. GAAP) and by International Financial Reporting Standards (IFRS)?
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Intermediate Accounting Reporting and Analysis
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
2nd edition
9781305727557, 1285453824, 9781337116619, 130572755X, 978-1285453828
