Basic Inventory Data for April 30 Are Presented Below for a Business

question 178

Multiple Choice

Basic inventory data for April 30 are presented below for a business that employs the lower-of-cost-or-market basis of inventory valuation to each category. $$\begin{array} { | c | c | r | r | } \hline \text { Commodity } & \begin{array} { c } \text { Inventory } \\\text { Quantity }\end{array} & \text { Cost per Unit } &{ \begin{array} { c } \text { Market Value } \\\text { per Unit }\end{array} } \\\hline \text { A } & 35 & \$ 52 & \$ 55 \\\hline \text { B } & 20 & 155 & 150 \\\hline \text { C } & 25 & 82 & 85 \\\hline \text { D } & 40 & 58 & 55 \\\hline\end{array}$$ What is the amount of reduction in the inventory at April 30 attributable to market decline?

• A) $14
• B) $40
• C) $180
• D) $220

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Definitions:

Subsidiaries

Companies that are controlled by another company, known as the parent company, through ownership of the majority of voting stock.

Intra-entity Gains

Profits realized from transactions within the same entity, often eliminated in preparation of the consolidated financial statements.

Separate Tax Returns

Tax filings made by individuals or married couples separately, rather than a joint tax return, often to optimize tax liability.