Misty Company Had 20,000 Units of Ending Inventory That Were

question 115

Multiple Choice

Misty Company had 20,000 units of ending inventory that were recorded at their cost of $5.00 per unit using the first-in, first-out (FIFO) method. The current replacement cost is $4.25 per unit. Which of the following amounts would be reported as Ending Merchandise Inventory on the balance sheet using the lower-of-cost-or-market rule?

• A)$100,000
• B)$142,500
• C)$120,000
• D)$85,000

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Definitions:

Patent Protection

Legal rights granted to inventors to exclusively produce, use, or sell their invention for a certain period of time.

Market Approval

The official authorization for a product to be sold in a specific market, often referring to regulatory approval for pharmaceuticals or medical devices.

Substitute Products

Goods or services that serve as alternatives to others, offering consumers options when making purchase decisions.

Pharmaceutical Products

Medications and drugs developed for medical use to diagnose, treat, or prevent diseases.