ACCT 304 DeVry Week 7 Complete Work Latest
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<strong>ACCT</strong> <strong>304</strong> <strong>DeVry</strong> <strong>Week</strong> 7 <strong>Complete</strong> <strong>Work</strong> <strong>Latest</strong><br />
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<strong>ACCT</strong> <strong>304</strong> <strong>DeVry</strong> <strong>Week</strong> 7 <strong>Complete</strong> <strong>Work</strong> <strong>Latest</strong><br />
<strong>ACCT</strong> <strong>304</strong> <strong>DeVry</strong> <strong>Week</strong> 7 DQ 1 LCM<br />
The lower-of-cost-or-market (LCM) approach was developed to avoid reporting inventory at an amount greater than the<br />
benefits it can provide. The LCM approach records losses in the period the value of the inventory drops below its cost<br />
instead of later in the period that the goods are ultimately sold. Is this a conservative or an aggressive approach? What<br />
does GAAP say about LCM?<br />
<strong>ACCT</strong> <strong>304</strong> <strong>DeVry</strong> <strong>Week</strong> 7 DQ 2 Inventory Errors<br />
It is discovered in 2013 that ending inventory from 2011 is understated. What accounts will be affected by this<br />
understatement, and how will they be affected? This is a situation that really happens. Start with the 2011 inventory<br />
being understated, and track the changes through the inventory account to 2013.<br />
<strong>ACCT</strong> <strong>304</strong> <strong>DeVry</strong> <strong>Week</strong> 7 Quiz<br />
(TCO 8) Masterlink Co., in applying the lower of cost or market method, reports its inventory at net realizable value.<br />
Which of the following statements is ?<br />
Option a<br />
Option b<br />
Option c<br />
Option d<br />
Question 2. Question : (TCO 8) Data related to the inventories of Costco Medical Supply is presented below:<br />
In applying the LCM rule, the inventory of surgical supplies would be valued at<br />
$115.<br />
$90.<br />
$80.<br />
$69. ( )<br />
Question 3. Question : (TCO 8) So. California Inc., through no fault of its own, lost an entire plant due to an earthquake<br />
on May 1, 2011. In preparing its insurance claim on the inventory loss, it developed the following data: inventory January
1, 2011, $300,000; sales and purchases from January 1, 2011 to May 1, 2011, $1,300,000 and $875,000, respectively.<br />
So. California Inc. consistently reports a 40% gross profit. The estimated inventory on May 1, 2011 is<br />
$302,500.<br />
$360,000.<br />
$395,000.<br />
$455,000.<br />
Question 5. Question : (TCO 8) Retrospective treatment of prior years' financial statements is not required when there<br />
is a change from<br />
average cost to FIFO.<br />
FIFO to LIFO.<br />
LIFO to average cost.<br />
All of the above
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