Castle TV, Incorporated purchased 1,400 monitors on January 5 at a per-unit cost of $126, and another 1,400 units on January 31 at a per-unit cost of $246. In the period fromFebruary 1 through year-end, the company sold 2,500 units of this product. At year-end, 300 units remained in inventory.Assume that the replacement cost of this monitor at year-end is $240 per unit. Using the first-in, first-out (FIFO) flow assumption and the lower-of-cost-or-market rulle, Castle TVshould write down the carrying value of this inventory by:Multiple ChoiceOOO$2,700.$0.$900.$1,800.

Name: Castle TV, Incorporated purchased 1,400 monitors on January 5 at a pe
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Description: Castle TV, Incorporated purchased 1,400 monitors on January 5 at a per-unit cost of $126, and another 1,400 units on January 31 at a per-unit cost of $246. In the period fromFebruary 1 through year-end, the company sold 2,500 units of this product.

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Assume that the replacement cost of this monitor at year-end is $240 per unit. Using the first-in, first-out (FIFO) flow assumption and the lower-of-cost-or should write down the carrying value of this inventory by

Assume that the replacement cost of this monitor at year-end is $240 per unit. Using the first-in, first-out (FIFO) flow assumption and the lower-of-cost-or should write down the carrying value of this inventory by

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...

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Castle TV, Inc. purchased 1,000 monitors on 5 January at a per-unit cost of $185, and another 1,000 units on 31 January at a per-unit cost of $230. In the period from 1 February through year-end, the company sold 1,800 units of this product. At year-end, 200 units remained in inventory. Assume that the net realizable value of this monitor at year-end is $210 per unit. Using weighted average cost flow assumption and the lower-of-cost-and-net-realizable-value rule, the ending inventory amounts to: O A. $46,000 O B. $41,500 O C. $83,000 O D. $42,000
AAA Hardware uses the LIFO method to value its inventory. Inventory at the beginning of the year consisted of 10,000 units of the company’s one product. These units cost $15 each. During the year, 60,000 units were purchased at a cost of $18 each and 64,000 units were sold. Near the end of the fiscal year, management is considering the purchase of an additional 5,000 units at $18. What would be the effect of this purchase on income before income taxes? Would your answer be the same if the company used FIFO instead of LIFO?
9 Castle TV, Incorporated purchased 1,600 monitors on January 5 at a per-unit cost of $140, and another 1,600 units on January 31 at a per-unit cost of $254. In the period from February 1 through year-end, the company sold 3,000 units of this product. At year-end, 200 units remained in inventory. Assume that the replacement cost of this monitor at year-end is $244 per unit. Using the FIFO flow assumption and the lower-of-cost-or-market rule, Castle TV should write down the carrying value of this inventory by: Multiple Choice О $0. ○ $1,000. ○ $2,000. ○ $3,000.
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During its first year of operation, Archer Company purchased 5,600 units of a product at $21 per unit. During the second year, it purchased 6,000 units of the same product at $24 per unit. During the third year, it purchased 5,000 units at $30 per unit. Archer managed to have an ending inventory each year of 1,000 units. The company uses the periodic inventory system.Prepare cost of goods sold statements that compare the value of ending inventory and the cost of goods sold for each of the three years using 1.the FIFO inventory costing method. 2.the LIFO method. 3.From the resulting data, what conclusions can you draw about the relationships between the changes in unit price and the changes in the value of ending inventory?
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