This question is about the lower of cost or market.

I understand that book value is ending inventory per adjusted trial balance and market value is ending inventory at replacement cost.

In this problem, are we writing market value since the book value is bigger than the market value? Is it right that book value cannot be greater than the market value?

WHAT IF the values given from the problem said that the market value is bigger than book value, what should I write on the balance sheet?

24. Below is data obtained by Arrowhead Corporation Ending inventory per adjusted trial balance, December 31, 2018 Ending inventory at replacement cost, December 31, 2018 Cost of goods sold per adjusted trial balance, December 31, 2018 Sales revenue per adjusted trial balance, December 31, 2018 Cash per adjusted trial balance, December 31, 2018 $50,500 $49,000 $40,000 $100,000 $80,000 What inventory amount will Arrowhead Corporation report on its balance sheet at December 31, 2018? a. $50,500 b. $49,000 c. $40,000 d. $100,000 e. $80,000