II - For each of the following short cases, you are asked to fully answer the following accounting related questions using the ASC. In your responses, you should

1) state the research question(s) and

2) use the "guidance sandwich" approach to presenting accounting research which involves interpreting the ASC . Be sure to include the full ASC cite(s) (down to the paragraph level) in your response and answer all parts of the question. You may have more than one cite in your response. If needed, be sure to clearly state and evaluate any assumptions you need to make in conducting the research.

Use the example below as a guide in presenting your response:

o Example scenario: Should inventory be measured initially at its market value or at cost?

o Example answer: Research question: Should inventory be measured initially at its market value or at cost?

ASC 330-10-30-1 states the following with respect to the initial measurement of inventory: "The primary basis of accounting for inventories is cost, which has been defined generally as the price paid or consideration given to acquire an asset. As applied to inventories, cost means in principle the sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location. It is understood to mean acquisition and production cost, and its determination involves many considerations."

That is, par. 30-1 requires the initial recording of inventories to be measured at cost, not at market value.