Your Company Has 500 Units in Inventory That Had Been

Multiple Choice

Your company has 500 units in inventory that had been purchased for $12 each and that would currently cost $15 to replace. Your supplier has just announced the cost of these goods is rising to $16.50.

A) Your company should make no adjustments to the inventory account.
B) Your company should adjust the inventory account using the lower of the recent market values, which is $15.
C) Your company should adjust the inventory account using the higher of the recent market values, which is $16.50.
D) Your company should adjust the inventory account using the average of the recent market values, which is