ACCT 304 Week 7 Quiz : Additional Issues De
1. Question : (TCO 8) In applying LCM, market cannot be
less than net realizable value minus a normal profit margin.
net realizable value less reasonable completion and disposal costs.
greater than net realizable value reduced by an allowance for normal profit margin.
less than cost.
2. Question : (TCO 8) Data related to the inventories of Costco Medical Supply is presented below:
In applying the LCM rule, the inventory of surgical equipment would be valued at
$230.
$240.
$170.
$152.
3. Question : (TCO 8) Howard’s Supply Co. suffered a fire loss on April 20, 2011. The company’s last physical inventory was taken on January 30, 2011, at which time the inventory totaled $220,000. Sales from January 30 to April 20 were $600,000, and purchases during that time were $450,000. Howard’s consistently reports a 30% gross profit. The estimated inventory loss is
$490,000.
$238,000.
$250,000.
None of the above
4. Question : (TCO 8) In calculating the cost-to-retail percentage for the retail method, the retail column will not include
purchases.
purchase returns.
abnormal shortages.
freight-in.
5. Question : (TCO 8) When applying the lower-of-cost-or-market rule to inventory valuation according to International Financial Reporting Standards, market is always
replacement cost.
net realizable value.
net realizable value reduced by a normal profit margin.
None of the above
