ACC 304 All Assignments ACC 304 All Assignments | Page 185

16) Under the lower-of-cost-or-market method, the replacement cost
of an inventory item would be used as the designated market value
17) During 2014, Larue Co., a manufacturer of chocolate candies,
contracted to purchase 200,000 pounds of cocoa beans at $4.00 per
pound, delivery to be made in the spring of 2015. Because a record
harvest is predicted for 2015, the price per pound for cocoa beans had
fallen to $3.30 by December 31, 2014.
Of the following journal entries, the one which would properly reflect in
2014 the
effect of the commitment of Larue Co. to purchase the
200,000 pounds of cocoa is
18) During 2014, Larue Co., a manufacturer of chocolate candies,
contracted to purchase 200,000 pounds of cocoa beans at $4.00 per
pound, delivery to be made in the spring of 2015. Because a record
harvest is predicted for 2015, the price per pound for cocoa beans had
fallen to $3.30 by December 31, 2014.
19) Which method of inventory pricing best approximates specific
identification of the actual flow of costs and units in most
manufacturing situations?