A company has inventory of $550,000 in a warehouse that's is completely destroyed by fire. There is no insurance to cover this loss. The cost to replace the inventory is $500,000. What inventory cost should the manager use to estimate economic profit?

Farley Bains, an auditor with Nolls CPAs, is performing a review of Indigo Corporation's Inventory account. Indigo did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $801,620. However, the following information was not considered when determining that amount. Prepare a schedule to determine the correct inventory amount. (Show amounts that reduce inventory with a negative sign or parenthesis e.g.-45 or parentheses e.g. (45).) 1. 2. 3. 4. Ending inventory-as reported Included in the company's count were goods with a cost of $205,400 that the company is holding on consignment. The goods belong to Nader Corporation. The physical count did not include goods purchased by Indigo with a cost of $40,300 that were shipped FOB shipping point on December 28 and did not arrive at Indigo's warehouse until January 3. Included in the Inventory account was $16,900 of office supplies that were stored in…

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Case Study: Phil Barely has his own business. He recently heard that there are different methods of valuing inventory and that some methods result in a lower net income, which can mean lower taxes. He sees a wonderful opportunity to minimize inventory value and net income by changing his inventory costing method each year. Directions: In writing explain to Phil why he would be violating an accounting principle if he implemented his idea. (Hint: Don’t forget to include the basis of your discussion, the accounting principle).

Due to the pandemic,  people are not shopping for the latest apparel in nearly the expected numbers.  This is resulting in excess inventory or stock.What type of cost does the current inventory stock represent?