Wakefield Company Uses a Perpetual Inventory System

question 57

Multiple Choice

Wakefield Company uses a perpetual inventory system. In August, it sold 2,000 units from its LIFO-base inventory, which had originally cost $35 per unit. The replacement cost is expected to be $45 per unit. The company is planning to reduce its inventory and expects to replace only 1,500 of these units by December 31, the end of its fiscal year. The company replaced 1,500 units in November at an actual cost of $50 per unit.
Based on the preceding information, in the entry in August to record the sale of the 2,000 units:

• A) Cost of Goods Sold will be debited for $70,000.
• B) Inventory will be credited for $85,000.
• C) Excess of Replacement Cost over LIFO Cost of Inventory Liquidation will be credited for $15,000.
• D) Excess of Replacement Cost over LIFO Cost of Inventory Liquidation will be credited for $67,000.

Understand the relationship between automatic stabilizers and budget outcomes.

Recognize the historical context and scale of U.S. budget deficits relative to GDP.

Comprehend the concept of a cyclically balanced budget in different economic conditions.

Know the implications of following a functional finance approach to federal budgeting.

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Definitions:

Sociological Perspective

A viewpoint in sociology that emphasizes understanding human behavior by placing it within its broader social context.

Separate But Equal

A doctrine that was used to justify racial segregation, asserting that separate facilities for different races were permissible if equal quality was maintained.

Ethnic Minority

An ethnic minority is a group of people who differ in race or color or in national, religious, or cultural origin from the majority of the population.

Solidarity

A unity or agreement of feeling or action, especially among individuals with a common interest; mutual support within a group.