A company reports inventories of $50,000. Does this amount represent the expected selling price?

Answer 1

Accounting standards require inventories to be stated at the lower of cost and net realisable value. If inventories are stated at NRV, the notes to the accounts must say so. If the notes are silent, then you can take it that the $50,000 is at cost, not the expected selling price. In a normal situation, selling price is higher than cost, otherwise why would the co. even want to stay in business?