Cypress Co

question 58

Multiple Choice

Cypress Co. has the following LIFO perpetual inventory records:
The current replacement cost of the ending inventory is $3,300. To apply the lower-of-cost-or-market rule, the journal entry would be:

• A)Debit Cost of Goods Sold $2,950, credit Inventory $2,950,
• B)Debit Inventory $2,950, credit Cost of Goods Sold $2,950,
• C)Debit Cost of Goods Sold $1,000, credit Inventory $1,000
• D)Debit inventory $1,000, credit Cost of Goods Sold $1,000

---

Definitions:

Producer Surplus

The difference between the amount producers are willing to sell a product for and the amount they actually receive, representing a measure of producer welfare.

Ruby

A precious gemstone known for its vibrant red color, commonly used in jewelry and as an industrial abrasive.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount they actually pay.