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.

---

Definitions:

Stranger Anxiety

A form of distress that young children experience when exposed to strangers, typically evident around 6 to 12 months of age.

Conservation

The principle of preserving natural resources and the environment through careful management and use.

Attachment

A deep and enduring emotional bond that connects one person to another across time and space.

Survival Impulse

The inherent drive in living organisms to avoid threats and sustain life.