Melbourne Company Uses the Perpetual Inventory Method

question 8

Multiple Choice

Melbourne Company uses the perpetual inventory method.Melbourne purchased 500 units of inventory that cost $4.00 each.At a later date the company purchased an additional 600 units of inventory that cost $5.00 each.If Melboune uses a LIFO cost flow method,and sells 800 units of inventory,the amount of ending inventory appearing on the balance sheet will be:

• A)$3,800.
• B)$1.350.
• C)$1,500.
• D)$1,200.

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Definitions:

Par Value

The nominal or face value of a bond, stock, or coupon as indicated on a certificate or instrument.

Common Stock Dividends Distributable

A liability recognized on a company's balance sheet for dividends declared on common stock that have not yet been paid to shareholders.

Income Statements

Financial statements that show a company's revenue, expenses, and profit over a specific period.

Proprietorships

A type of business entity that is owned and run by one individual and where there is no legal distinction between the owner and the business.