Suppose MWW decided to write off some of its inventory because it could not be sold (perhaps it was damaged or destroyed).

a. What journal entry (or worksheet entry) would MWW make to record the write-off?

b. Suppose the amount of the write-off was sizable. How/where would you report the write-off in the income statement? Explain why.

c. Are there any alternatives to how the amount of the write-off could be reported?

d. How would different ways of reporting the write-off affect stakeholders’ interpretations of the statements?