The Tolar Company Has 400 Obsolete Desk Calculators That Are

question 65

Multiple Choice

The Tolar Company has 400 obsolete desk calculators that are carried in inventory at a total cost of $26,800. If these calculators are upgraded at a total cost of $10,000, they can be sold for a total of $30,000. As an alternative, the calculators can be sold in their present condition for $11,200.
-What is the net advantage or disadvantage to the company from upgrading the calculators?

• A) $8,000 disadvantage.
• B) $8,800 advantage.
• C) $18,000 disadvantage.
• D) $20,000 advantage.

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Definitions:

Nonvoting Preferred Stock

A type of preferred stock that does not grant the holder voting rights in the company's shareholder meetings, typically in exchange for certain financial preferences.

Outstanding Shares

The total number of shares of stock that are currently owned by shareholders, including shares held by institutional investors and restricted shares held by insiders and company officers.

Balance Sheet

An accounting statement that captures the financial standing of a corporation by itemizing assets, obligations, and shareholders' capital at a certain time.

Available-For-Sale Debt Investments

Debt securities not classified as held-to-maturity or trading securities, carried at fair value, with unrealized gains or losses reported in other comprehensive income.