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Included in cost of sales is a reserve for a possible decline in the market value of finished goods inventory of $50,000. There is also

Included in cost of sales is a reserve for a possible decline in the market value of finished goods inventory of $50,000. There is also an obsolescence reserve of $70,000 for some raw materials that were purchased from a supplier and were later found to be defective and worthless. So far, the supplier has refused to allow XYZ Ltd.to return the materials for a refund

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