Holliday Company's Inventory Records Show the Following Data: a Physical

question 191

Multiple Choice

Holliday Company's inventory records show the following data: A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for ₤3 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. What is the cost of goods available for sale?

• A) ₤5,250
• B) ₤9,000
• C) ₤11,250
• D) ₤25,500

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Definitions:

Depreciation Expenses

The systematic allocation of the depreciable amount of an asset over its useful life to account for wear and tear, obsolescence, or decay.

Equivalent Units

A concept in cost accounting used to express the amount of work done by incomplete units in terms of fully completed units.

Average Cost Method

An inventory costing method that determines the cost of goods sold and ending inventory based on the average cost of all similar items available during the period.

Milling Blanks

The process of machining raw materials into a preliminary shape before further processing.