Lumber Number Ltd What Effect Will This Information Have on the 2003 Statement

question 107

Multiple Choice

Lumber Number Ltd. began business in 2001. It uses a periodic inventory system and values inventory at lower-of-cost-or-market. The following data represents price information related to the inventory on a unit basis: $\begin{array} { | l | l | l | l | l | } \hline & 2002 \text { Inventory } & &{ 2003 \text { Inventory } } \\\hline & \text { Beginning } & \text { Ending } & \text { Beginning } & \text { Ending } \\\hline \text { Cost } & \$ 80 & \$ 86 & \$ 86 & \$ 98 \\\hline \text { Market } 80 & 84 & 84 & 90 \\\hline\end{array}$
What effect will this information have on the 2003 statement of income if the allowance method is used?

• A) $2 holding loss
• B) $4 holding loss
• C) $6 holding loss
• D) $8 holding loss

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Definitions:

Spontaneous Recovery

The reappearance of a previously extinguished conditioned response after a period of no exposure to the conditioned stimulus.

Sexually Arousing

Refers to stimuli or aspects that induce sexual excitement or desire in an individual.

Appropriate US

An unconditioned stimulus that naturally induces an unconditioned response without the need for prior learning or conditioning.

Geometric Figure

A shape or form consisting of lines and angles, defined in geometry.