Washington Distribution Co Washington Records Losses That Result from Applying the Lower of on a FIFO

question 48

Multiple Choice

Washington Distribution Co. has determined its December 31, 2020, inventory on a FIFO basis at $240,000. Information pertaining to that inventory follows: $\begin{array}{llcc} \text { Etimated selling price } & \$255,000 \\ \text { Estimated cost of disposal } &10,000\\ \text { Normal profit margin } &30,000\\\end{array}$
Washington records losses that result from applying the lower of cost and net realizable value rule. At December 31, 2020, the loss that Washington should recognize is

• A) $0.
• B) $5,000.
• C) $15,000.
• D) $25,000.

---

Definitions:

Frequency Of Impulses

Refers to the rate at which nerve or action potentials are generated and transmitted across neurons.

Trichromatic Theory

A theory of color vision that proposes that the eye has three types of receptors with differing sensitivities to different light wavelengths.

Perceive White

The process by which the visual system interprets a spectrum of light that reflects off surfaces without significant absorption, resulting in the perception of white color.

Three Types Of Cones

Refers to the three kinds of cone cells in the human eye that are sensitive to different wavelengths of light, enabling color vision: red, green, and blue cones.