At December 31,the Selig Company Has Ending Inventory with a Historical

question 39

Multiple Choice

At December 31,the Selig Company has ending inventory with a historical cost of $630,000.Assume the company uses the perpetual inventory system.The current replacement cost of the inventory is $608,000.The net realizable value is $650,000.The normal profit on this inventory is $50,000.Before any adjustments at the end of the period,the cost of goods sold account has a balance of $900,000.Following U.S.GAAP,which journal entry is required on December 31 to adjust the ending balance of inventory if the direct method is used?

• A)Debit Cost of Goods Sold for $20,000 and credit Inventory for $20,000.
• B)Debit Inventory for $20,000 and credit Cost of Goods Sold for $20,000.
• C)Debit Cost of Goods Sold for $22,000 and credit Inventory for $22,000.
• D)Debit Inventory for $22,000 and credit Cost of Goods Sold for $22,000.

---

Definitions:

Siblings

Individuals sharing at least one parent, often referred to as brothers or sisters.

Discipline

The methods a parent uses to teach and socialize children.

Inductive

A reasoning process that involves making generalizations based on observations or specific instances.

Peer Relationships

Social connections between individuals of similar ages, often facilitating developmental processes such as socialization and identity formation.