Question
Teddy Bear Inc. paid cash to purchase 200 units of inventory. They paid $18.00 each for the first hundred units and $20.00 each for the
Teddy Bear Inc. paid cash to purchase 200 units of inventory. They paid $18.00 each for the first hundred units and $20.00 each for the second hundred units. Teddy Bear Inc. then sold 100 units for $100 each. If all transactions occurred in cash, which of the following statements is correct?
-Cash flow from operating activities is $8,000 assuming the last-in, first-out (LIFO) inventory cost flow method is used.
-Cash flow from operating activities is $6,200, regardless of the inventory cost flow method used.
-Cash flow from operating activities is $6,200 assuming the weighted-average inventory cost flow method is used.
-Cash flow from operating activities is $8,200 assuming the first-in, first-out (FIFO) inventory cost flow method is used.
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