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Cougar Corp. purchased 200 units of inventory for $15 per item on July 20. On July 31, the items were made obsolete by a newly released product. The effect of this change caused the items purchased on July 20 to only be worth $8. What amount would Cougar Corp. report on its financial statements related to this inventory

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Answer: $1,600

Explanation:

The company would have to report the inventory at its current market value and not the one that it bought it at so that the cost of goods sold can accurately reflect the reduced value of the inventory.

Current market value is:

= 200 units * 8

= $1,600