The cost of Baxters inventory at the end of the year was $50,000. Due to obsolescence, the

Question:

The cost of Baxter’s inventory at the end of the year was $50,000. Due to obsolescence, the cost to replace the inventory was only $40,000. Net realizable value—what the inventory could be sold for—is $42,000.
Required
Determine the amount Baxter should report on its year-end for inventory assuming the company follows
(a) U.S. and
(b) IFRS.

GAAP
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