Hoover Company Purchased Two Identical Inventory Items

question 51

Multiple Choice

Hoover Company purchased two identical inventory items.The item purchased first cost $33.00.The item purchased second cost $35.00.Then Hoover sold one of the inventory items for $62.00.Based on this information,which of the following statements is true?

• A)The ending inventory is $35.00 if Hoover uses the LIFO cost flow method.
• B)The gross margin is $28.00 if Hoover uses the weighted-average cost flow method.
• C)The cost of goods sold is $35.00 if Hoover uses the FIFO cost flow method.
• D)The cost of goods sold is $33.00 if Hoover uses the LIFO cost flow method.

Recognize the principles behind capitalizing or expensing costs related to the development, acquisition, or defense of intangible assets.

Understand the GAAP requirements for expense recognition related to R&D, patents, and other intangibles.

Calculate amortization expense for intangible assets including patents and copyrights.

Identify the international accounting standards and variability in treatment for R&D costs.

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Definitions:

Valid Contract

A legally binding agreement between parties to do or not do certain things.

Avoid Liability

Strategies or actions taken to minimize or evade legal responsibility or penalties.

Intoxicated Person

An individual under the influence of alcohol or drugs to the extent that their mental and physical faculties are significantly impaired.

Voidable

A term used to describe a contract that is valid and enforceable, but may be legally declared void at the option of one of the parties due to certain defects.