EX 7-12 Merchandise inventory on the balance sheet

Based on the data in Exercise 7-11 and assuming that cost was determined by the FIFO
method, show how the merchandise inventory would appear on the balance sheet.

Answer:
The merchandise inventory would appear in the Current Assets section, as follows:  

      Merchandise inventory—at lower of cost (FIFO) or market........ $10,320

Alternatively, the details of the method of determining cost and the method of valuation could be presented in a note.

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