Maxim Corp During the Year, Maxim Sold 400 Units

question 15

Multiple Choice

Maxim Corp. has provided the following information about one of its products: $\begin{array}{clrr}\text { Date }&\text { Transaction } &\text { Number of Units }&\text { Cost per Unit }\\\hline1 / 1 & \text { Beginning Inventory } & 200 & \$ 140 \\6 / 5 & \text { Purchase } & 400 & \$ 160 \\11 / 10 & \text { Purchase } & 100 & \$ 200\end{array}$ During the year, Maxim sold 400 units. What is ending inventory using the average cost method?

• A) $48,000.
• B) $64,000.
• C)$50,000.
• D)$62,000.

---

Definitions:

Personal Property

Property that includes movable items such as furniture, cars, and investments, as opposed to real estate.

200% Declining-Balance Rate

A method of accelerated depreciation allowing for a double rate of depreciation on assets, compared to the straight-line method.

MACRS

The Modified Accelerated Cost Recovery System, a method of depreciation for tax purposes that allows faster write-offs on property.

Mid-Month Convention

A rule for depreciation of business assets that assumes assets are acquired and disposed of at the midpoint of the month.