ACC 304 Course Great Wisdom / tutorialrank.com ACC 304 Course Great Wisdom / tutorialrank.com | Page 184

15) Under the lower-of-cost-or-market method, the replacement cost
of an inventory item would be used as the designated market value

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