12-Which statement is true concerning the lower-of-cost-or-market method? Select one:

A. Inventories must be adjusted to replacement cost at year-end if the cost in the accounting records is less than the market value to replace the inventory.

B. It requires companies to maintain inventory reserves.

C. It requires the company to reduce its inventory to its original cost if prices are rising.

D. Companies must record a write-down if the cost of their inventories is greater than their replacement cost

13-The records of Decks Plus Company showed the following information about a delivery truck purchased for $37,675:

Accumulated depreciation at December 31, Year 3 $12,000

Depreciation for the first six months of Year 4 $2,000

On July 1, Year 4, the machine was sold for $19,500. How much is the gain or loss on disposal? Select one:

a. $350 gain

b. $4,175 loss

c. $4,500 loss

d. $15,650 gain

15-Reed, Inc. has the following asset account balances:

Buildings and equipment $5,084,750

Accumulated depreciation 622,500

Patents 375,000

Goodwill 325,000

Accounts receivable 215,000

Land 2,507,500

What is the total amount that should be reported on Reed, Inc.s balance sheet under Property, plant, & equipment, net? Select one:

a. $7,830,000

b. $7,752,500

c. $6,969,750

d. $7,207,500

17-Disposal, Inc. provided the following information concerning its accounting records:

Sales revenue (all on account) $435,000

Accounts receivable, gross, January 1 28,200

Allowance for uncollectible accounts, January 1 1,350

Collections from customers during the year 358,500

Accounts written off as uncollectible during the year 1,100

How much is the balance of the Accounts Receivable, gross account at December 31? Select one:

a. $125,500

b. $103,600

c. $125,400

d. $123,500