QUESTION 5 What is the dollar value of the FLOOR at the end of year 1 in LCM terminology? Assume that the error in LCM adjustment wasn't corrected. (hint: they used $10 as the cost of inventory). THE FOLLOWING INFORMATION PERTAINS TO QUESTIONS 2-5 An item of inventory purchased in Period 1 for $15.00 has been incorrectly written down to its current replacement cost of $10.00 (it should have been left at $15 because that replacement cost was an error, it was actually much higher. Cost of $15 was the correct amount that should have been used). It sells during the following period (Period 2) for $30.00, its normal selling price, with disposal costs of $3.00. Assume the same sales price, disposal costs and normal profit margin also existed in the first period. The profit that should have been recorded in year 2 is how many dollars? 12 QUESTION 3 Because of the error in application of LCM, period 1's income is understated. True False QUESTION 4 Income of period 2 is also understated because of the error. True False