Answer the following 2 questions: Question1: Ashraf Company began operations in 2020 and determined its ending inventory at cost and at NRV on December 31, 2020, and December 31, 2021. This information is presented below. Cost Net Realizable Value 12/31/2020 $120,000 $110,000 12/31/2021 230,000 265,000 What is the effect of applying LCNRV (lower of cost or net realizable value) on income for 2021? v a- No effect b- Increases for $10,000 C- Increases for $35,000 d- Increases for $20,000 11 and the cost to complete product Z is $20, what is the amount that should be

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Quèstion 1
Answer the following 2 questions:
Question1:
Ashraf Company began operations in 2020 and determined its ending inventory at cost and at NRV on December 31 , 2020, and December 31, 2021. This information is presented below.
Cost
Net Realizable Value
12/31/2020
$120,000
$110,000
12/31/2021
230,000
265,000
What is the effect of applying LCNRV (lower of cost or net realizable value) on income for 20212
a- No effect
b- Increases for $10,000
C- Increases for $35,000
d- Increases for $20,000
Question 2:
Given the historical cost of the product, Z is $139, the selling price of product Z is $190, costs to sell product Z are $11, and the cost to complete product Z is $20, what is the amount that should be used to
value the inventory under IIAS( 2)? v
a.
$170.
b. $150.
C.
$159.
11:33 AM
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8/28/202
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Transcribed Image Text:Quèstion 1 Answer the following 2 questions: Question1: Ashraf Company began operations in 2020 and determined its ending inventory at cost and at NRV on December 31 , 2020, and December 31, 2021. This information is presented below. Cost Net Realizable Value 12/31/2020 $120,000 $110,000 12/31/2021 230,000 265,000 What is the effect of applying LCNRV (lower of cost or net realizable value) on income for 20212 a- No effect b- Increases for $10,000 C- Increases for $35,000 d- Increases for $20,000 Question 2: Given the historical cost of the product, Z is $139, the selling price of product Z is $190, costs to sell product Z are $11, and the cost to complete product Z is $20, what is the amount that should be used to value the inventory under IIAS( 2)? v a. $170. b. $150. C. $159. 11:33 AM C420 37°C Haze 8/28/202 e to search DELL Delete PrtScr Insert F12 F10 F11 F9 F7 F8 F6 F5 F3 Backspace & 8 A
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