89. The Parker Company uses the perpetual inventory system and has computed the cost of its inventory to be $6,400 as follows: 200 units of Product A at a unit cost of $10; 300 units of Product B at a unit cost of $12; and 100 units of Product C at a unit cost of $8. The current replacement cost of each of the above items is $12.50, $11 and $7, respectively. Parker's accountant is not sure yet whether to apply the lower-of-cost-or-market rule by individual items or by the entire stock in aggregate. Indicate whether each of the following statements pertaining to the Parker Company is true or false.
_____ a) When referring to Product A, the "cost" totals $2,000.
_____ b) If Parker selects to apply the lower-of-cost-or-market rule by individual items, Product A would be listed at $12.50 per unit.
_____ c) Parker would record a write-down of inventory if is uses the individual items approach, but would not if it uses the aggregate approach.
_____ d) If Parker uses the individual items approach, $6,000 will be reported for inventory on the balance sheet.
_____ e) For Product C, the lower of cost or market is $800.
90. On February 2, 2011, a fire destroyed the entire inventory of Blum Co. The following information was found in accounting records: Purchases, $260,000; Sales $460,000; beginning inventory, $80,000; average gross profit percentage during the past five years, 30%. Based on the above information, indicate whether each of the following statements is true or false.
_____ a) The cost of goods available for sale is $322,000.
_____ b) The cost of goods sold as a percent of sales is 70%.
_____ c) The estimated cost of goods sold is $202,000.
_____ d) Estimated inventory lost in the fire is $18,000.
_____ e) Estimated gross profit for the period up to the date of the fire was $138,000.