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7. The following information was taken from the records of Cindy's Candies: Cost Market Value Item Quantity per Unit per Unit A 50 $24 $18 B 20 40 42 10 20 10 a. Cindy's reports inventory at the lower of cost or market (applied individually). The necessary adjusting entry would reduce assets and equity by $400. b. increase assets and equity by $2.200. reduce assets and equity by $360. d reduce assets and increase liabilities by $400. C. 8. Thompson Company uses the periodic inventory method and wants to estimate the amount of ending inventory in order to prepare quarterly financial statements. Sales for the quarter were $13,000. Based on historical records, the company earns an average gross margin of 25 percent on sales. Beginning inventory for the quarter was $3,500 and purchases were $7,100. The amount of ending inventory was $3,250. b. $850. $10,600 d. $9,750. a. C. Use the following information to answer the next two questions. Springdale Company reports the following information about inventory activity for Year 2: Quantity Beginning inventory 1st purchase 2nd purchase Sales 200 150 110 220 Per Unit Cost/Sales Price $2.00 $2.10 $2.15 $3.20 a. 9. Assuming the company uses the periodic inventory method and LIFO cost flow, cost of goods sold reported on the Year 2 income statement would be $473.00 b. $704.00. $455.00 d. $467.50. C. a. 10. Using the moving weighted average inventory cost flow method, the average unit cost after the first purchase would be (rounded to the nearest penny). $2.15. b. $2.12. $2.04. d. $2.09