Answer:
Inventory write down to $2,600
Inventory loss of $600
Explanation:
According to the generally accepted accounting principles we always record inventory at the lower of market or net realizable value.
We record at Cost of $13/unit which gives us a total closing inventory of
Closing inventory = 13*200 = $2,600, this is the amount that is to be recorded in the balance sheet.
A loss of 16-16=$3/ unit is to be recorded, giving a total loss of 3*200 = $600
This loss can be recorded in the cost of goods sold part when the inventory is actually sold.
Hope that helps.
