Loft include in inventory at year-end, if it uses the total of the
inventory to apply the lower of cost or market?
Question 19
On January 1, 2004, Card Corp. signed a three-year,
noncancelable purchase contract, which allows Card to
purchase up to 500,000 units of a computer part annually from
Hart Supply Co. at $.10 per unit and guarantees a minimum
annual purchase of 100,000 units. During 2004, the part
unexpectedly became obsolete. Card had 250,000 units of this
inventory at December 31, 2004 and believes these parts can be
sold as scrap for $.02 per unit. What amount of probable loss
from the purchase commitment should Card report in its 2004
income statement?
Question 20
Mill Co.'s allowance for uncollectible accounts was $100,000 at
the end of 2005 and $90,000 at the end of 2004. For the year
ended December 31, 2005, Mill reported bad debt expense of
$16,000 in its income statement. What amount did Mill debit to
the appropriate account in 2005 to write off actual bad debts?
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ACC 577 Week 3 Quiz (100 % Correct Answers)
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