The net realizable value of Lake Corporation’s inventory has declined below its cost. Allyn Conan, the controller, wants to use the loss method to write down inventory because it more clearly discloses the decline in the net realizable value and does not distort the cost of goods sold. His supervisor, financial vice president Bill Ortiz, prefers the costof-goods-sold method to write down inventory because it does not call attention to the decline in net realizable value.InstructionsAnswer the following questions.(a) What, if any, is the ethical issue involved?(b) Is any stakeholder harmed if Bill Ortiz’s preference is used?(c) What should Allyn Conan do?

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A: a. b. c. d.

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Q: physical flow of inventory

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A: Lean businesses aim to: Reduce inventory levels--true

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A:

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A: The question is based on the concept of Cost Accounting.

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A:

Q: . A low inventory turnove he firm has an above-ave nventory is obsolete or da D True D False

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A: Barber Technologies designs and develops software to be used for the management of inventory by both…

Q: Samsung Electronics reports the following regarding its accounting for inventories. Inventories are…

A:

Q: 24.Which of the following is not a potential consequence of carrying insufficient inventory to meet…

A: Inventory is a current asset.

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.