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

question 60

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 Merchandise Inventory 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:

Pervasive

Spreading widely throughout an area or a group of people, often with negative connotations.

Occasional Problems

Issues or difficulties that arise infrequently and are not of a continuous nature.

Antidepressants

Medications designed to alleviate symptoms of depression by adjusting the chemical balances in the brain.

Mood Disorders

A category of mental disorders involving persistent disturbances in a person's mood, affecting their emotional state.