Assume That an Entity Acquired 150 Items of Inventory at a Cost

question 1

Multiple Choice

Assume that an entity acquired 150 items of inventory at a cost of $90 each,and sold 100 of the items for $160 each when the replacement cost to the entity was $120 each.Also assume that the replacement cost of the 50 remaining items of inventory at year end was $130.Under the Edwards and Bell approach to current cost accounting,what portion of operating profit would be available for dividends?

• A) $4 000 [100 x ($160 - $120)]
• B) $1 000 [100 x ($130 - $120)]
• C) $3 000 [100 x ($160 - $130)]
• D) $1 500 [50 x ($160 - $130)]

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Definitions:

Supply Chains

A network of individuals, organizations, resources, activities, and technology involved in the creation and sale of a product, from the delivery of raw materials from the supplier to the manufacturer, and ultimately to the end user.

Competent Parties

Individuals or entities that are legally able to enter into a binding contract, having the necessary legal authority and mental capacity.

Legal Subject Matter

The specific theme, topic, or focus of a legal document or discussion, often defining the scope of legal rights and duties.

Offer and Acceptance

The essential components of a valid contract, where an offer is made and then accepted by the other party.