During the first quarter, a company's application of lower of cost or market methods indicated a $150,000 loss from a temporary market decline, which is expected to be restored in the fiscal year.During the second quarter, the market reversed the decline.Which of the following situations indicates a proper treatment of these facts?
A) A $37,500 loss recognized in the first quarter and no recovery recognized in the second quarter.
B) A $150,000 loss recognized in the first quarter and a $90,000 recovery in the second quarter.
C) A $150,000 loss recognized in the first quarter and a $50,000 recovery in the second quarter.
D) No loss recognized in the first quarter and no recovery recognized in the second quarter.
Correct Answer:
Verified
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