Fulbright Corporation uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition):

• 41 units at $90 per unit
• 71 units at $72 per unit
• 172 units at $70 per unit

Sales for the year totaled 274 units, leaving 10 units on hand at the end of the year.

Ending inventory using the FIFO method is:

Management has adopted a policy of reporting its unsold inventory at the end of each year at the lower of LIFO cost or market. Which of the following statements is correct?

A company has four types of products in its inventory as shown below:

Product	Quantity	Cost	Net Realizable Value
A	15	$ 7	$ 10
B	10	18	12
C	20	8	6
D	15	11	15

When accounting for the lower of cost or net realizable value by individual items, the year-end adjustment to write down inventory would be:

Marilee's Electronics uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following data is available from the company records for the month of June 2024:

	Cost	Retail
Beginning inventory	$ 80,000	$ 130,000
Net purchases	261,000	500,000
Net markups		25,000
Net markdowns		35,000
Net sales		520,000

The estimated ending inventory is:

On January 1, 2024, a company acquired land for $7.5 million. The company paid $1.5 million in cash and signed a 5% note requiring the company to pay the remaining $6.0 million plus interest on December 31, 2025. An interest rate of 5% properly reflects the time value of money for this type of loan agreement. What amount of interest expense would the company record on December 31, 2025 (two years later)?

A company has four types of products in its inventory as shown below: When accounting for the lower of cost or net realizable value by individual items, the year-end adjustment to write down inventor would be: Multiple Choice $0. $15. $100. $10. Explanation Product B=($18$12)10=$60 Product C=($8$6)20=$40 Total adjustment =$60+$40=$100 The costs of Products A and D are below their net realizable value so no adjustment is needed. On January 1,2024 , a company acquired land for $7.5 million. The company paid $1.5 million in cash and signed a 5% note requiring the company to pay the remaining $6.0 million plus interest on December 31,2025 . An interest rate of 5% properly reflects the time value of money for this type of loan agreement. What amount of interest expense would the company record on December 31, 2025 (two years later)? Multiple Choice $600,000 $315,000 $615,000 $300,000 Explanation Interest expense in 2025=($6.0 million +$300,000 unpaid interest in 2024)5%=$315,000. Interest expense in 2024=$6.0 million 5%= $300,000. Fulbright Corporation uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition): - 41 units at $90 per unit - 71 units at $72 per unit - 172 units at $70 per unit Sales for the year totaled 274 units, leaving 10 units on hand at the end of the year. Ending inventory using the FIFO method is: Multiple Choice $750. $700. $900. $734. Explanation 10 units $70=$700 Marilee's Electronics uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following data is available from the company records for the month of June 2024: The estimated ending inventory is: Note: Round cost-to-retail ratio to 2 decimal places. Multiple Choice $55,000. $52,061. $57,311. $54,127. Explanation Management has adopted a policy of reporting its unsold inventory at the end of each year at the lower of LIFO cost or market. Which of the following statements is correct? Multiple Choice Ending inventory will be correctly stated under any scenario when current replacement cost is less than cost. Ending inventory will be correctly stated when (i) current replacement cost is less than cost and (ii) replacement cost is less than net realizable value less a normal profit margin. Ending inventory will be correctly stated when (i) current replacement cost is less than cost and (ii) replacement cost is less than net realizable value and greater than net realizable value reduced by an allowance for an approximately normal profit margin. Ending inventory will be correctly stated when (i) current replacement cost is less than cost and (ii) replacement cost is greater than net realizable value. Explanatlon Note that market is the inventory's current replacement cost (by purchase or reproduction) except that: (1) market should not be greater than the net realizable value (this forms a "ceiling" on market), and (2) market should not be less than net realizable value reduced by an allowance for an approximately normal profit margin (this forms a "floor" on market). A company has four types of products in its inventory as shown below: When accounting for the lower of cost or net realizable value by individual items, the year-end adjustment to write down inventor would be: Multiple Choice $0. $15. $100. $10. Explanation Product B=($18$12)10=$60 Product C=($8$6)20=$40 Total adjustment =$60+$40=$100 The costs of Products A and D are below their net realizable value so no adjustment is needed. On January 1,2024 , a company acquired land for $7.5 million. The company paid $1.5 million in cash and signed a 5% note requiring the company to pay the remaining $6.0 million plus interest on December 31,2025 . An interest rate of 5% properly reflects the time value of money for this type of loan agreement. What amount of interest expense would the company record on December 31, 2025 (two years later)? Multiple Choice $600,000 $315,000 $615,000 $300,000 Explanation Interest expense in 2025=($6.0 million +$300,000 unpaid interest in 2024)5%=$315,000. Interest expense in 2024=$6.0 million 5%= $300,000. Fulbright Corporation uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition): - 41 units at $90 per unit - 71 units at $72 per unit - 172 units at $70 per unit Sales for the year totaled 274 units, leaving 10 units on hand at the end of the year. Ending inventory using the FIFO method is: Multiple Choice $750. $700. $900. $734. Explanation 10 units $70=$700 Marilee's Electronics uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following data is available from the company records for the month of June 2024: The estimated ending inventory is: Note: Round cost-to-retail ratio to 2 decimal places. Multiple Choice $55,000. $52,061. $57,311. $54,127. Explanation Management has adopted a policy of reporting its unsold inventory at the end of each year at the lower of LIFO cost or market. Which of the following statements is correct? Multiple Choice Ending inventory will be correctly stated under any scenario when current replacement cost is less than cost. Ending inventory will be correctly stated when (i) current replacement cost is less than cost and (ii) replacement cost is less than net realizable value less a normal profit margin. Ending inventory will be correctly stated when (i) current replacement cost is less than cost and (ii) replacement cost is less than net realizable value and greater than net realizable value reduced by an allowance for an approximately normal profit margin. Ending inventory will be correctly stated when (i) current replacement cost is less than cost and (ii) replacement cost is greater than net realizable value. Explanatlon Note that market is the inventory's current replacement cost (by purchase or reproduction) except that: (1) market should not be greater than the net realizable value (this forms a "ceiling" on market), and (2) market should not be less than net realizable value reduced by an allowance for an approximately normal profit margin (this forms a "floor" on market)