A company reports inventory using the lower of cost and net realizable value. Below is information related to its year-end inventory:InventoryQuantityCostNRVItem A100$25$30Item B503020Calculate ending inventory under the lower of cost and net realizable value and record any necessary adjustment to inventory.
What will be an ideal response?
Ending inventory = $3,500.
| Cost of Goods Sold | 500 | ? |
| Inventory | ? | 500 |
Write-down = $4,000 (total cost) - $3,500 (LCM) = $500.
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