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Suppose that management estimated the lower of cost and net realizable value of some obsolete inventory at $99,000 and wrote it down from $120,000, recognizing
Suppose that management estimated the lower of cost and net realizable value of some obsolete inventory at $99,000 and wrote it down from $120,000, recognizing a loss of $21,000. The auditors obtained the following information: The inventory in question could be sold for an amount between $78,000 and $92,000. The costs of advertising and shipping could range from $5,000 to $7,000. Required: a-2. Write the appropriate accounting entry.
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