Reichart Company Has Four Different Categories of Inventory

question 98

Multiple Choice

Reichart Company has four different categories of inventory. Quantity, cost, market value for each inventory category is shown below: The company carries inventory at lower-of-cost-or-market applied to the inventory in aggregate. The implementation of the lower-of-cost-or-market rule would:

• A)increase assets and equity by $55.50.
• B)reduce assets and equity by $101.00.
• C)reduce assets and equity by $79.00.
• D)None of these.

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Definitions:

Logarithms

Mathematical operations that are the inverse of exponentiation, indicating the power to which a base number is raised to obtain a particular number.

Condense

To make something denser or more compact, especially in the context of writing or presenting information.

Logarithms

The magnitude a base, such as 10 or e, must reach when raised to result in a designated number.

Expand

To multiply out the terms of an expression.