Blarney Ltd

question 8

Multiple Choice

Blarney Ltd.had a fire at its warehouse and was trying to determine the cost of the inventory lost.For the year to date sales had been $525,000, opening inventory was $25,000, purchases to date were $198,000, the cost-to-sales ratio is normally 60%.Inventory not damaged in the fire was $18,000.What was the cost of the inventory damaged in the fire?

• A)$110,000
• B)$124,000
• C)$160,000
• D)$74,000

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Definitions:

Principal Debtor

The main individual or entity who is obligated to repay a debt or loan according to the terms agreed upon.

Rights

Entitlements or permissions granted to individuals or entities by law, social norms, or ethical principles.

Conditional Surety

A surety agreement where the guarantor's obligations are triggered by the occurrence of specific conditions.

Absolute Surety

A guarantee without conditions or limitations, ensuring complete assurance or certainty.