Gizmo Corporation Adopted the Dollar-Value Method of Accounting for Its

question 25

Multiple Choice

Gizmo Corporation adopted the dollar-value method of accounting for its inventory on January 1, 2011.On that date, its ending inventory was valued at $90,000.On December 31, 2012, ending inventory's value at current prices was $120,000.If the current year index is 120%, the value of Gizmo's ending inventory is

• A)$144,000
• B)$108,000
• C)$120,000
• D)$102,000
• E)None of the above

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Definitions:

Semi-Annually

Occurring twice a year; a term often used in the context of paying interest or dividends.

Yield To Maturity

The total return anticipated on a bond if it is held until its maturity date, considering all interest payments and the principal repayment.

Par

The face value of a bond or other security, at which it can be redeemed at maturity or the amount of money equal in value to a particular share or bond.

Coupon

The yearly payment of interest to those holding bonds, represented as a percentage of the bond's nominal value.