Merchandise inventory is reported as current asset on the balance sheet. So, the correct answer is (c).
The cost of finished goods (COGS) that a merchant or distributor has on hand to sell to its clients during a relevant accounting period is referred to as merchandise inventory. The pricing of the books or periodicals a bookshop offers for sale would be considered part of its merchandise inventory.
When these items are sold during an accounting period, the cost of those items is added to the cost of goods sold and is reflected as an expense on the earnings statement for the accounting cycle during which the sale was made. Whenever an item's cost is recorded as a current asset, it stays on the balance sheet until it is sold if it is not sold during the accounting cycle.
According to the lesser of price or market rule, you must lower the recorded cost of merchandise inventory to its market price and charge the shortfall to expenditures if the market value of inventory falls less than its recorded cost.
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