Answer: Option (A)
Explanation:
Under the rules of books as per the US GAAP, we tend to record all the inventory at the cost or the NRV i.e. Net realizable value whichever is less. Here in this particular case,
Cost for each unit = $130
NRV = $90.
Thus inventory will be recorded at $90 each. This means that we've incurred a loss of $40 each ($130 - $90 = $40).
Accordingly, total loss = $40 [tex]\times[/tex] 2 = $80
