Is there some sort of word bank or something?
A I believe is the correct answer
$4 million.
An item is worth what the market is willing to pay for it, which is sometimes different than the estimated value.
The answer and explanation to part 1 is given in the attachment.
Note:
Also, The complete part a question is attached.
Answer:
Decrease Profit and Inventory Asset value as well.
Explanation:
This will Decrease the closing inventory value which will increase the cost of goods, decrease the profit and ultimately decrease the retained earning value in the balance sheet. It also decrease the Inventory value in the current assets section of balance sheet, which will ultimately decrease the total asset value.