An Economy Produces 1,000,000 Computers Valued at $2,000 Each

question 135

Multiple Choice

An economy produces 1,000,000 computers valued at $2,000 each.Households purchase 200,000 computers, of which 100,000 are imported.Businesses purchase 300,000 domestically produced computers, the government purchases 300,000 domestically produced computers, and 100,000 domestically produced computers are sold abroad.At the end of the year, the computer manufacturers hold the unsold computers in inventory.What is the value of GDP?

• A)$0.9 billion
• B)$1.0 billion
• C)$1.8 billion
• D)$2.0 billion

Calculate inventory valuation using different methods like FIFO, LIFO, and weighted average under perpetual and periodic systems.

Analyze the effect of inventory valuation methods on financial statements and tax implications.

Understand the ethical considerations in inventory management and reporting.

Explain the rationale and calculation of the retail inventory method.

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Definitions:

Breach of Contract

The failure to perform any term of a contract, written or verbal, without a legitimate legal excuse.

Contributory Negligence

A legal defense where if the plaintiff is found to have contributed to their own harm, they may be barred from recovering damages from the defendant.

Self-Defense

The right to prevent harm to oneself or others under threat, by use of reasonable force.

Battery

The act of causing offensive or harmful physical contact to another person intentionally or as a result of recklessness.