Calculations of the prior december-correction

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Question: On December 31, the commodities handled by the company had been traded in the open market for $1.40 per kilogram. This price had prevailed for two weeks, following an official market report that predicted vastly enlarged supplies; however, no purchases were made at $1.40. The price throughout the preceding year, and several prior years, had been about $2. On January 18, 20X9, the price returned to $2, following disclosure of an error in the official calculations of the prior December-correction of which destroyed the expectations of excessive supplies. Inventory at December 31, 20X8, had been valued on a lower-of-cost-and-net-realizable-value basis, using the prevailing price known at that time, $1.40.

Reference no: EM133327641

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