AME ror each of the following statements, indicate whether the statement is true (T) or false (F) By indicating the letter in the space provided on the separate answer sheet. 1. A company should abandon the historical cost principal when the future utility of the inventory item falls below its original cost. 2. A reason for valuing inventory at net realizable value is that sometimes it is too difficult to obtain cost figures. 3. The purpose of the "floor" in lower-of-cost-or-market considerations is to avoid overstating inventory. 4. If the contract price on a noncancelable purchase commitment exceeds the market price, the buyer should record any expected losses on the commitment in the period in which the market decline takes place. 5. When a buyer enters into a formal, noncancelable purchase contract, an asset and a liability are recorded at the inception of the contract. 6. In most situations, the gross profit percentage is stated as a percentage of cost. 7. When the conventional retail method includes both net markups and net markdowns in the cost-to-retail ratio, it approximates a lower-of-cost-or-market valuation. 8. The LIFO retail method assumes that markups and markdowns apply only to the goods purchased during the period. 9. A disadvantage of the gross profit method is that it uses past percentages in determining the markup 10. The gross profit method can be used to approximate the dollar amount of inventory on hand