Question
KL Company deals with agro-chemicals. The balance sheet of the company reveals that the inventories for the year ending 2020 were $151,000 and for the
KL Company deals with agro-chemicals. The balance sheet of the company reveals that the inventories for the year ending 2020 were $151,000 and for the year ending 2021 it was found to be $145,000. The value of sales for the year 2021 is $520,000 and the cost of sales is $336,000. It is also estimated that the cost of sales will increase by 7% annually with an increase in sales. The inventory for the year ending 2024 was estimated using inventory turnover. Thus estimated data projected volatility. The company decided to even out the forecast by applying compounded annual rate of growth. What will be the balance of inventory for the year ending 2024 if compounded annual rate of growth is applied? (Round off intermediate calculations to two decimal places and final answer to the nearest value).
Choose an answer
A
The balance of inventory for the year ending 2024 if compounded annual rate of growth is applied will be $167,172.
B
The balance of inventory for the year ending 2024 if compounded annual rate of growth is applied will be $192,995.
C
The balance of inventory for the year ending 2024 if compounded annual rate of growth is applied will be $195,484.
D
The balance of inventory for the year ending 2024 if compounded annual rate of growth is applied will be $175,450.
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