Research Exercise 5 1. Locate the Master Glossary in the FASB Codication, and answer the following questions: a. What is the formal denition in the glossary of the term \"Inventory?\" b. ABC Company has a number of machines used for manufacturing its products. One of ABC's machine suppliers is trying to get rid of its existing machines to make room for a new model, and is offering them at a sharply discounted price. As such, ABC has decided to purchase a number of the sale-priced machines. ABC intends to retire its existing machines early and to offer them for sale. Based on the denition above. now that these machines are no longer used in production and they are held for sale, should ABC reclassify them as inventory? 2. What is the Codicaon topic number for inventory? 3. What types of enes are not covered by the guidance in the Inventory Topic? (Provide the Codication reference for your answer] 4. What is the objective of accounting for inventories? [Provide the Codication reference for your answer) 5. There are a number of reasons why a company might determine that it will not recover in sale the full cost that it has put into its inventory {physical deterioration, obsolescence, changes in price levels, etc}. In this situation, guidance states that the inventory must be written down to the lower of cost or market. When such a writedown occurs, it is not expected that the inventory will recover in value. However: on rare occasions inventory may recover its value prior to being sold. What is the SEC's position on accounting for this restoraon of inventory value? If it becomes apparent prior to sale that inventory previously writtendown will recover in value, should the inventory continue to be carried at the reduced market value? Should it be restored to the new market value {not to exceed original historical cost}? [Provide the Codication reference for your answer)