Rowan Company has four different categories of inventory. The quantity, cost, and market value for each of the inventory categories are as follows:ItemQuantityCostPer UnitMarket Value Per Unit1220$ 4.40 $ 4.60 2130$6.20 $ 6.00 3100$10.00 $9.25 425$20.50 $25.00 The company carries inventory at lower-of-cost-or-market applied to the entire stock of inventory in the aggregate. How would the implementation of the lower-of-cost-or-market rule impact the elements of the company's financial statements?
A. Decrease total assets and stockholders' equity by $79.00.
B. Increase total assets and stockholders' equity by $55.50.
C. Decrease total assets and stockholders' equity by $101.00.
D. Have no effect on total assets or stockholders' equity.
Answer: D
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Indicate whether the statement is true or false
Specter Consulting purchased $7,000 of supplies and paid cash immediately. Which of the following general journal entries will Specter Consulting make to record this transaction? Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.
A.
| Supplies Expense | 7,000 | |
| Accounts Payable | 7,000 |
B.
| Supplies | 7,000 | |
| Accounts Payable | 7,000 |
C.
| Supplies | 7,000 | |
| Cash | 7,000 |
D.
| Accounts Payable | 7,000 | |
| Supplies | 7,000 |
E.
| Cash | 7,000 | |
| Supplies | 7,000 |
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