Steel Company, a wholesaler that has been in business for two years,
purchases its inventory from various suppliers. During the two years,
each purchase has been at a lower price than the previous purchase.
Steel uses the lower of cost or market method to value inventories. The
original cost of the inventory is above replacement cost and below their
net realizable value. That is, the net realizable value less the normal
profit margin is below replacement cost.

Required: What do you think about the criteria used
to determine which costs should be included in the inventory? Summarize
the reason for the amounts Steel Company?s inventory should be reported
on the balance sheet by explaining the application of lower of cost or
market rule in this situation. Appraise, judge, and support why the
lower of cost or market rule is used to report inventory.

Your well-written paper must
be 2-3 pages, in addition to title and reference pages. The paper should
be formatted according to APA requirements Cite at least two peer-reviewed sources, in addition to the required reading for the module.

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