Sandra Company Had 200 Units of Inventory on Hand at the End

question 89

Multiple Choice

Sandra Company had 200 units of inventory on hand at the end of the year. These were recorded at a cost of $12 each using the last-in, first-out (LIFO) method. The current replacement cost is $10 per unit. The selling price charged by Sandra Company for each finished product is $15. In order to record the adjusting entry needed under the lower-of-cost-or-market rule, the Cost of Goods Sold will be:

• A)debited by $2,000.
• B)credited by $2,000.
• C)debited by $400.
• D)credited by $400.

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Definitions:

Nuclei

Membrane-bound organelles found in eukaryotic cells that contain the cell's genetic material.

Pollen Grain

A microscopic body that contains the male reproductive cells of plants; it is capable of fertilizing the female ovule.

Endosperm

The part of a seed that acts as a food store for the developing plant embryo, usually rich in starch or oil.

Developing Embryo

The early stage of growth and development in multicellular organisms, following fertilization and before birth or hatching.