The Cost of Fulton's Inventory at the End of the Year

question 45

Essay

The cost of Fulton's inventory at the end of the year was $145,000. Due to obsolescence, the cost to replace the inventory was only $90,000. Net realizable value-what the inventory could be sold for-is $102,000.
REQUIRED:
Determine the amount Fulton should report on its year-end balance sheet for inventory assuming the company follows a U.S. GAAP and b IFRS.

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Definitions:

Productive Inputs

The resources used in the production of goods and services, including labor, capital, and raw materials.

Biodiesel

A renewable, bio-based fuel that is produced from vegetable oils, animal fats, or recycled greases, suitable for use in diesel engines.

Economically Viable

A state or condition in which an activity or entity is capable of generating enough income to cover its expenses, sustainably over time.

User Cost

The cost associated with the use of a product or service, including depreciation, maintenance, and opportunity cost of using the asset over time.