Alfalfa Company Developed the Following Information About Its Inventories in Applying

question 142

Multiple Choice

Alfalfa Company developed the following information about its inventories in applying the lower-of-cost-or-market (LCM) basis in valuing inventories: $\begin{array}{rrr}&&\text { Market }\\\text { Product } & \text { Cost } & \text { value }\\\text { A } & \$ 112,000 & \$ 120,000 \\\text { B } & 80,000 & 76,000 \\\text { C } & 155,000 & 162,000\end{array}$ If Alfalfa applies the LCM basis, the value of the inventory reported on the balance sheet would be

• A) $343,000.
• B) $347,000.
• C) $358,000.
• D) $362,000.

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Definitions:

Dividend Policy Decision

The strategy a company uses to decide the amount and timing of dividend payments to its shareholders.

Current Cash Income

Income received or realized in cash during a specific period, not accounting for non-cash expenses like depreciation.

Bond Indenture

A legal contract between a bond issuer and a bondholder that specifies the terms of the bond, such as the interest rate, maturity date, and redemption provisions.

Mature Industry

An industry that has experienced long-term growth and is characterized by stable earnings, low growth rates, and often intense competition.