# PSC 9 - Name Date PROBLEM SET CHAPTER 9 ACCOUNTING 2303(5...

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Name: __________________________ Date: _____________ PROBLEM SET – CHAPTER 9 ACCOUNTING 2303 (5 POINTS EACH) 1. Lower-of-cost-or-market. For each case below, determine the unit value that should be used for inventory costing following "lower of cost or market value" as described in ARB No. 43. ANSWERS: Case A: Case D: Case B: Case E: Case C: Page 1

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2. Relative sales value method. Adler Realty Company purchased a plot of ground for \$800,000 and spent \$2,100,000 in developing it for building lots. The lots were classified into Highland, Midland, and Lowland grades, to sell at \$100,000, \$75,000, and \$50,000 each, respectively. Instructions Refer to the table below to allocate the cost of the lots using a relative sales value method. COST OF LOTS : Highland: Midland: Lowland:
3. Gross profit method. An inventory taken the morning after a large theft discloses \$60,000 of goods on hand as of March 12. The following additional data is available from the books: Inventory on hand, March 1 \$ 84,000

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## This note was uploaded on 09/04/2009 for the course ACNT 2303 taught by Professor Haywood during the Spring '09 term at Lone Star College.

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PSC 9 - Name Date PROBLEM SET CHAPTER 9 ACCOUNTING 2303(5...

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