Moss Co. has determined its December 31, 20X

8 inventory to be $500,000 on a FIFO basis.

Information pertaining to that inventory follows:

Estimated selling price

$400

,000

Estimated cost of disposal

1

0,000

Normal profit margin

3

0,000

Current replacement cost

38

0,000

a.

Moss records losses that result from applying lower of cost or net realizable value. On

December 31, 20X8, what should be the net carrying value of Moss' inventory?

b.

How would your answer to part a. change if Mosss inventory cost was determined to be

$500,000 on a LIFO basis?