If a Company Values Inventory at the Lower of Cost

question 121

Multiple Choice

If a company values inventory at the lower of cost or market, which of the following is the value of merchandise inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole. $\begin{array} { | l | l | l | l | } \hline \text { Item } & \text { Inventory Quantity } & \text { Unit Cost Price } & \text { Unit Market Price } \\\hline \text { Product C } & 420 & \$ 6 & \$ 5 \\\hline \text { Product D } & 370 & 12 & 14 \\\hline\end{array}$

• A) $6,960
• B) $7,700
• C) $6,540
• D) $7,280

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Definitions:

Cold Ecosystem

An ecosystem characterized by low temperatures and short growing seasons, often found in polar or high-altitude regions.

Coniferous Forest

A biome characterized by trees with needles or scale-like leaves, including many species that bear cones.

Polar Ice

Frozen water found in the polar regions of Earth, including both sea ice and land-based ice sheets that play a crucial role in the global climate system.

Tundra

A biome characterized by cold temperatures, low biodiversity, short vegetation, and a layer of permanently frozen soil beneath the surface layer.