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

question 13

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.What would be the realised holding gain on the inventory that was sold?

• A) $7 000 [100 x ($160 - $90)]
• B) $4 000 [100 x ($130 - $90)]
• C) $3 000 [100 x ($120 - $90)]
• D) $500 [50 x ($130 - $120)]

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Definitions:

Primary Storage

Refers to the main storage of a computer where data is temporarily stored and accessed by the processor directly, such as RAM.

Registers

High-speed storage areas in the CPU that store very small amounts of data and instructions for short periods.

The ALU

An Arithmetic Logic Unit (ALU) is a digital circuit used to perform arithmetic and logic operations in computers.

Mathematical Calculations

The process of using mathematical symbols and methods to perform quantifiable measurements and solve numerical problems.