A Company Loses Its Opening Financial Records in a Fire

question 59

Multiple Choice

A company loses its opening financial records in a fire.During the following year, it incurred costs of production of $250,000 and sold $300,000 in merchandise.It took an inventory count and found that it had $100,000 in product on hand.What should the company's opening inventory show before the fire?

• A)$50,000
• B)$100,000
• C)$150,000
• D)Cannot be determined from the above information.

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Definitions:

Corporate Veil

A legal concept that separates the actions and liabilities of a corporation from those of its shareholders or directors.

Corporate Property

Assets owned by a corporation, including real estate, intellectual property, and physical goods.

Shareholders

Individuals or entities that own shares in a corporation, reflecting a proportion of ownership in the company.

Corporate

Pertaining to a corporation, which is a legal entity recognized by law as separate from its owners and having its own rights, privileges, and liabilities.