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NEW QUESTION: 1
Due to a decline in market price in the second quarter, Petal Co. incurred an inventory loss. The market
price is expected to return to previous levels by the end of the year. At the end of the year the decline had
not reversed. When should the loss be reported in Petal's interim income statements?
A. Ratably over the third and fourth quarters.
B. In the second quarter only.
C. In the fourth quarter only.
D. Ratably over the second, third, and forth [sic] quarters.
Answer: C
Explanation:
Choice "d" is correct. When the loss is probable and estimable, the expected loss must be recorded in full.
This loss becomes such at the end of the fourth quarter. Therefore, the inventory must be valued on the
year-end at the lower of cost or market, recognizing the loss at that time. Choice "a" is incorrect. Expected
losses must be recorded in full when the loss is probable and estimable and not ratably over several
quarters. Choice "b" is incorrect. Expected losses must be recorded in full when the loss is probable and
estimable and not ratably over several quarters. Choice "c" is incorrect. Since the loss is not probable at
the end of the second quarter, no amount should be recognized at that time.
NEW QUESTION: 2
A. Option B
B. Option A
C. Option D
D. Option C
Answer: D
NEW QUESTION: 3
A project manager is using historical data from multiple projects to estimate activity durations. Which of the following network diagrams would BEST allow for the utilization of the information available?
A. GERT
B. PERT
C. CPM
D. CCM
Answer: B