E 15-9 Interim accounting for various situationstax 1. An inventory loss from a market price decline occurred
Question:
E 15-9 Interim accounting for various situations—tax 1. An inventory loss from a market price decline occurred in the first quarter, and the decline was not expected to reverse during the fiscal year. However, in the third quarter, the inventory’s market price recovery exceeded the market decline that occurred in the first quarter. For interim financial reporting, the dollar amount of net inventory should:
a Decrease in the first quarter by the amount of the market price decline and increase in the third quarter by the amount of the decrease in the first quarter b Decrease in the first quarter by the amount of the market price decline and increase in the third quarter by the amount of the market price recovery c Decrease in the first quarter by the amount of the market price decline and not be affected in the third quarter d Not be affected in either the first quarter or the third quarter
Step by Step Answer:
Advanced Accounting
ISBN: 9781292214597
13th Global Edition
Authors: Joseph H. Anthony, Bruce Bettinghaus, Floyd A. Beams, Kenneth Smith