A Holder of a $19,200, 10%, 240-Day Note Dated June

question 55

Multiple Choice

A holder of a $19,200, 10%, 240-day note dated June 1 decides to sell the note at a discount. The note is sold on July 18 at a discount of 11%. Find the proceeds.

• A) $19,272.25
• B) $19,265.99
• C) $19,382.04
• D) $19,036.36

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Definitions:

Variable Costing

An accounting approach that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, excluding fixed overheads.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, carried over from the end of the previous period.

Inventory Units

The individual items or products that are available for sale, in production, or in stock as part of a company's inventory.

Variable Costing

Variable costing is an accounting method that includes only variable production costs (materials, labor) in product costs, excluding fixed overhead.