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Mickey Mouse Company uses lower-of-cost-or-net realizable value to value its inventory. The inventory account is adjusted using an allowance account. Mickey Mouse Company started operations
Mickey Mouse Company uses lower-of-cost-or-net realizable value to value its inventory. The inventory account is adjusted using an allowance account. Mickey Mouse Company started operations on January 1, 2019 and has the following information related to its inventory:
Date | Inventory at Cost | Inventory at Net Realizable Value |
---|---|---|
December 31, 2019 | $592,000 | $451,000 |
December 31, 2020 | $294,000 | $233,000 |
What effect will the above information have on Mickey Mouse Companys net income for 2020?
($218,000)
$80,000
$0
($61,000)
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