Multiple Choice
Shipman,Inc.has 6 units in inventory on December 31.The units were purchased in November for $200 each.The price lists from suppliers indicate the current replacement cost of the item to be $198 each.What is the effect on gross profit if Shipman values its ending merchandise inventory using the lower-of-cost-or-market rule?
A) The gross profit would increase by $2.
B) The gross profit would not be affected.
C) The gross profit would decrease by $12.
D) The gross profit would increase by $12.
Correct Answer:
Verified
Correct Answer:
Verified
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