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Question 17 (2 points) A company just starting its business made the following four inventory purchases in June: Date June 1 150 units X $3.20 - $480 June 10 200 units X $3.30 $660 June 15 200 units X $3.40 $680 June 28 150 units X $3.50 = $525 Total 700 units $2,345 On June 25, the company made its first sale when a local customer purchased 500 units for $3,500. Using the FIFO cost formula under the perpetual method, the amount of ending inventory at June 30 is $645 O $1,650 $1,700 O $695 Question 18 (1 point) Contract assets and liabilities cannot be recognized until both parties have performed under the contract. True False Question 19 (1 point) To apply the lower of cost and get realizable value to inventory, companies must compare the total cost of every inventory item to the total net realizable value of every inventory item. True False Solar Inc. made a large math error in calculating depreciation expense and the preparation of its year-end financial statements. The error caused the net income to be reported at almost double the correct amount. When Solar discovered the error in the following year, correction of the error should be treated as a(n) O adjustment to beginning retained earnings, net of tax O increase in depreciation expense for the year in which the error is discovered. gain for the year in which the error was made. O component of income for the year in which the error is discovered, but separately listed on the income

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