Inventory Was Acquired as Part of a Business Combination at the End

Inventory was acquired as part of a business combination at the end of 20X1. The inventory was sold in 20X2. How should the fair value increment for the inventory at acquisition be treated for consolidation at the end of 20X2?

A) It should be added to inventory.
B) It should be added to sales.
C) It should be added to the cost of goods sold.
D) It should be added to retained earnings.

Correct Answer:

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