Holliday Company's Inventory Records Show the Following Data A Physical Inventory on December 31 Shows 2,000 Units on Units

question 89

Multiple Choice

Holliday Company's inventory records show the following data:
$\begin{array}{lrr}&\text { Units }&\text { Unit Cost }\\\text { Inventory, January } 1 & 5,000 & £ 4.50 \\\text { Purchases: June 18 } & 4,500 & 4.00 \\\text { November } 8 & 3,000 & 3.50\end{array}$

A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $£ 6$ each. The company has an effective tax rate of $20 \%$ . Holliday uses the periodic inventory method. What is the cost of goods available for sale?

• A) \( £ 10,500 \)
• B) \( £ 18,000 \)
• C) \( £ 22,500 \)
• D) \( £ 51,000 \)

Understand the concepts of temporary and permanent differences in taxable and accounting incomes.

Apply the knowledge of enacted tax rates to compute deferred tax liabilities or assets.

Learn the implications of tax policies on a company’s financial statements, including loss carryforwards and carrybacks.

Analyze the impact of changes in tax rates on deferred taxes and financial statements.

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Definitions:

Tissue

Groups of similar cells in an organism that work together to perform specific functions.

Pathology Present

The existence of disease or disease processes as identified by studying bodily tissues and fluids.

Muscular

Relating to or affecting the muscles of the body.

Sternocleidomastoid

A major muscle in the neck that runs from the sternum and clavicle to the mastoid process of the temporal bone and is involved in head rotation and flexion.