Exhibit 7-1 Edwards Co. Purchased Raw Materials with a Cost of $95,000

question 35

Multiple Choice

Exhibit 7-1
Edwards Co. purchased raw materials with a cost of $95,000 on March 2, 2015. Credit terms of 3/20, n/60 applied. Edwards paid for the purchase on March 18, 2015. Calculate the amount at which Edwards would record the inventory on March 2, 2015, the date of purchase, using the method given.
-Refer to Exhibit 7-1. Edwards uses a perpetual inventory system and the gross price method.

• A) $42,000
• B) $76,000
• C) $92,150
• D) $95,000

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Definitions:

Unfair Advantage

An unethical or unjust edge or benefit in a competitive situation that is often gained through exploitation of confidential information or other unethical practices.

Crafty

Exhibiting cleverness or ingenuity, especially in deceiving others.

Fairness

A principle concerning equitable and impartial treatment or behavior without favoritism or discrimination.

Honesty

The quality of being fair, truthful, and free from deceit in one's actions and communications.