A Company Has Beginning Inventory of 10 Units at a Cost

question 130

Multiple Choice

A company has beginning inventory of 10 units at a cost of $10 each on February 1.On February 3,it purchases 20 units at $12 each.12 units are sold on February 5.Using the FIFO periodic inventory method,what is the cost of the 12 units that are sold?

• A)$120
• B)$124
• C)$128
• D)$130
• E)$140

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Definitions:

Corporation

A legal entity distinct from its owners, providing limited liability protection, and able to own assets, incur debt, and sell ownership shares.

Directors

Members of a company's board of directors, elected by shareholders to govern and make major decisions on behalf of the company.

Internal Revenue Code

The comprehensive body of tax laws and regulations in the United States, governing federal tax obligations for individuals and organizations.

Federal Income Taxes

Taxes levied by the United States federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.