Question
I8k Company began business on the first day of 20X1. The following are the Companys purchases of inventory: Date Inventory Items Quantity Cost per unit
I8k Company began business on the first day of 20X1. The following are the Companys purchases of inventory:
Date Inventory Items Quantity Cost per unit
March 17 Item A 100 units $10
May 19 Item B 55 units $12
Nov 14 Item C 100 units $13
On October 20, 20X1, 120 units were sold, for $35 each, leaving inventory of 135 units. The tax rate for 20X1 was 25%. The Company has no other operating expenses and uses a periodic inventory system.
Required: Please choose the best answer to the following questions based on the above information.
Suppose the Company uses LIFO for inventory valuation. What is the balance of the inventory account on December 31, 20X1?
multiple choice 1
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$1350
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$1620
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$1420
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$1720
Suppose the Company uses FIFO for inventory valuation. What is the net income for 20X1?
multiple choice 2
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$2220
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$2070
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$2960
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$1995
Suppose the Company uses LIFO for inventory valuation and a perpetual inventory system. What is the gross profit for 20X1?
multiple choice 3
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$2760
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$2660
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$2890
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$2960
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On April 1, a company purchased two units of inventory, A and B. The cost of unit A was $665, and the cost of unit B was $585. On April 30, the company had not sold the inventory. The net realizable value of unit A was now $675 while the net realizable value of unit B was $500. The adjustment associated with the lower of cost and net realizable value on April 30 will be:
1. | Cost of Goods Sold | 75 | |
Inventory | 75 | ||
2. | Inventory | 75 | |
Cost of Goods Sold | 75 | ||
3. | Cost of Goods Sold | 85 | |
Inventory | 85 | ||
4. | Inventory | 85 | |
Cost of Goods Sold | 85 |
Multiple Choice
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Option 3
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Option 1
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Option 2
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Option 4
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