Davis Appliance Center, Inc. paid $355,000 for inventory held at year end. The replacement cost of this inventory was $345,000. The inventory could be sold for $358,000 and the disposal costs would be $3,000. Normal profit on the sale of this inventory is $15,000. (Use U.S. generally accepted accounting principles (GAAP) to answer questions 4.54, 4.55, and 4.56 below.)
1. What is the market value of this inventory?
2. What is the lower of cost or market value for this inventory?
3. Prepare the entry needed, if any, to write down this inventory to market value.
4. What entry would be needed, if any, to write down inventory to lower of cost or market under international financial reporting standards (IFRS)?