Use the Information Below to Answer the Following Questions ?
-The Firm Uses the Periodic System, and There Are

question 51

Multiple Choice

Use the information below to answer the following questions.
The following lots of a particular commodity were available for sale during the year:
?
$\begin{array}{ll}\text { Beginning inventory } & 10 \text { units at } \$ 30 \\\text { First purchase } & 25 \text { units at } \$ 32 \\\text { Second purchase } & 30 \text { units at } \$ 34 \\\text { Third purchase } & 10 \text { units at } \$ 35\end{array}$ ?
-The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year rounded to the nearest dollar according to the average cost method?

• A) $655
• B) $620
• C) $690
• D) $659

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Definitions:

Discount Rate

The interest rate that the Federal Reserve charges commercial banks for loans, or a rate used in discounted cash flow analysis to determine the present value of future cash flows.

Compounded Semi-annually

Interest calculation method where the interest is added to the principal twice a year, leading to a growth in the amount at a faster rate than simple interest.

Compounded Quarterly

This term refers to the calculation and addition of interest to the principal sum of a deposit or loan on a quarterly basis.

RRSP

A Canadian retirement savings plan that defers taxes on contributions and investment earnings until withdrawal.