Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. teel distribution co. has determined its december

Teel Distribution Co. has determined its December 31, 2007 inventory on a FIFO basis at...

90.2K

Verified Solution

Question

Accounting

Teel Distribution Co. has determined its December 31, 2007 inventory on a FIFO basis at $250,000. Information pertaining to that inventory follows:

Estimated selling price $255,000

Estimated cost of disposal/completion 10,000

Normal profit margin 30,000

Current replacement cost 225,000

Teel records losses that result from applying the lower-of-cost-or-market rule. At December 31, 2007, the loss that Teel should recognize is

a. $0. b. $5,000. c. $20,000. d. $25,000.

Answer key says is is B, but I keep getting D. Please help to explain.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

Which of the following courses of action can Congress take if the Supreme Court declares...

Electrical Engineering
1.2K views

Discuss the role of a substation in a power system?

Advance Math
1.2K views

Recall the following theorem, phrased in terms of least upper bounds. Theorem (The Least Upper Bound Property...

Advance Math
1.2K views

Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature...

Basic Math
1.2K views

son science and The new education system was initiall soon Soviet model of education In...

Basic Math
1.2K views

Decide if the given statement is true or false If it is false give the...

Calculus
1.2K views

3 Find the slope if possible Write an equation for each line V a b...

Accounting
1.2K views

Cabell Products is a division of a major corporation. Last year the division had total...

Accounting
1.2K views

Harwell, Incorporated, produces two products, Product A and Product B. Harwell uses a traditional volume-based...

Accounting
1.2K views

LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the...

Accounting
1.2K views

View Policies Show Attempt History Current Attempt in Progress Cheyenne Corp uses a periodic Inventory...

Finance
1.2K views

Which of the following is not included in the Statistical section of the CAFR? ...