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

question 156

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 $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method.
Under the FIFO method, the December 31 inventory is valued at

• A) $14,000.
• B) $14,500.
• C) $15,000.
• D) $18,000.

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Definitions:

Par Value

The face value of a bond or stock as stated by the issuer, which does not necessarily reflect its market value.

Redemption Value

The amount that an investment instrument, such as a bond, is worth at its maturity or when it is redeemed.

Stated Value

Arbitrary value placed by the board of directors on each share of no-par stock to fulfill legal capital requirements.

Total Assets

The sum of all assets, both current and noncurrent, owned by a company, representing the resources it has at its disposal.