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Roughrider Ltd.(Roughrider)uses the lower of cost and net realizable value rule to value its football equipment inventory.Roughrider defines market as net realizable value.Roughrider's inventory on January 31,2017 had a cost of $1,200,000 and an NRV of $1,125,000.
Required:
a.By how much should Roughrider's inventory be written down?
b.Prepare the journal entry that Roughrider should prepare to record the write-down.
c.What amount should be reported for inventory on Roughrider's January 31,2017 balance sheet?
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