In conversation with the president of widget tek inc., you have learned that much of the company’s inventory consists of older widget tek inc. models. these older models sell for less than the newer widget tek inc. models, but customers strongly prefer the newer models. the company believes that the net realizable value of the older inventory is less than its value in the subsidiary inventory ledger. considering all of the information you have about widget tek inc., answer the following questions. 1. to better account for the older inventory, the president of widget tek inc. wonders whether the inventory should be valued using a different method. do you agree, and why or why not? no, because will . 2. will a change in inventory method increase a company’s net income on its financial statements? . 3. when is inventory not valued at cost? because an average is used, weighted average does not value inventory at cost.

Two firms, a and b, each currently emit 100 tons of chemicals into the air. the government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution emitted into the air. the government gives each firm 40 pollution permits, which it can either use or sell to the other firm. it costs firm a $200 for each ton of pollution that it eliminates before it is emitted into the air, and it costs firm b $100 for each ton of pollution that it eliminates before it is emitted into the air. after the two firms buy or sell pollution permits from each other, we would expect that firm a will emit a. 100 fewer tons of pollution into the air, and firm b will emit 20 fewer tons of pollution into the air. b. 20 more tons of pollution into the air, and firm b will emit 100 fewer tons of pollution into the air. c. 50 fewer tons of pollution into the air, and firm b will emit 50 fewer tons of pollution into the air. d. 20 fewer tons of pollution into the air, and firm b will emit 100 fewer tons of pollution into the air.