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Unformatted text preview: 1. Lower-of-cost-or-market Student Response Value Correct Answer Feedback A. is most conservative if applied to the total inventory. B. is most conservative if applied to major categories of inventory. C. is most conservative if applied to individual items of inventory. 100% D. must be applied to major categories for taxes. Score: 1/1 2. Paul Konerko Company sells product 2005WSC for $20 per unit. The cost of one unit of 2005WSC is $18, and the replacement cost is $17. The estimated cost to dispose of a unit is $4, and the normal profit is 40%. At what amount per unit should product 2005WSC be reported, applying lower-of-cost-or-market? Score: 1/1 3. In 2006, Lucas Manufacturing signed a contract with a supplier to purchase raw materials in 2007 for $700,000. Before the December 31, 2006 balance sheet date, the market price for these materials dropped to $510,000. The journal entry to record this situation at December 31, 2006 will result in a credit that should be reported Score: 1/1 4....
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This note was uploaded on 12/12/2010 for the course ACCT 121A taught by Professor He during the Spring '10 term at San Jose State University .
- Spring '10