Roughrider Ltd

question 63

Essay

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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Definitions:

No-need Objection

A rejection from a potential customer expressing a lack of necessity or interest in a product or service.

Fiduciary Objection

A legal or ethical concern related to the responsibility of managing another's money or assets with the highest degree of care.

Promotion

One of the four main elements of the marketing mix, it increases company sales by communicating product information to potential customers.

Source Objection

A type of sales objection where the customer hesitates or refuses to buy based on the credibility or reputation of the source or seller.