Lumber Number Ltd What Effect Will This Information Have on the 2003 Statement

question 132

Multiple Choice

Lumber Number Ltd.began business in 2001.It uses a periodic inventory system and values inventory at lower-of-cost-or-market.The following data represents price information related to the inventory on a unit basis: $$\begin{array} { | l | r| r |r |r| r | } \hline & { \text { 2002 Inventory } } & &{ \text { 2003 Inventory } } \\\hline & \text { Beginning } & \text { Ending } & \text { Beginning } & \text { Ending } \\\hline \text { Cost } & \$ 80 & \$ 86 & \$ 86 & \$ 98 \\\hline \text { Market } & 80 & 84 & 84 & 90 \\\hline\end{array}$$ What effect will this information have on the 2003 statement of income if the allowance method is used?

• A)$2 holding loss
• B)$4 holding loss
• C)$6 holding loss
• D)$8 holding loss

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Definitions:

Sampling Distribution

The arrangement of probability for a specific statistic, following the analysis of a randomly selected sample.

Sampling Distribution

The probability distribution of a given statistic based on a random sample, used to make inferences about the population from which the sample was drawn.

Sample Proportion

The quotient of the number of times an event occurs in a sample to the total number of observations in the sample.

Barack Obama

The 44th President of the United States, serving from 2009 to 2017, notable for being the first African American to hold the office.