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

question 13

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:

Balance Sheet

A financial statement that provides a snapshot of a company's financial position, showing assets, liabilities, and shareholders' equity at a specific point in time.

Net Income

The total profit of a company after all expenses, including taxes and operational costs, have been subtracted from its total revenue.

Cost of Goods Sold

Direct spending associated with producing the merchandise a company trades, including both materials and manpower costs.

Worksheet

A columnar device used by accountants to aid them in completing the accounting cycle—often just referred to as "spreadsheet." It is not a formal report.