Should I calculate inventory value based on the price I paid for the item wholesale or the price that is currently available to purchase at wholesale (its lower now)?

[VictorW9 · Accepted solution]

Your purchases should be the actual cost you paid for the inventory not the current available price. However, the value of closing inventory should be the lower of cost or net realizable value.

Calculating your Cost of Goods Sold (COGS):

Opening Inventory               XXXXX

+ Purchases                          XXXXX 

Goods Available for Sale     XXXXX

- Closing Inventory               XXXXX 

Cost of Goods Sold              XXXXX