Based on the data in Exercise 7-15 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........................ $41,880
Alternatively, the details of the method of determining cost and the method of valuation could be presented in a note.