Samson Company Had the Following Balances and Transactions During 2013

question 68

Multiple Choice

Samson Company had the following balances and transactions during 2013. $$\begin{array} { | l | l | } \hline \text { Beginning inventory } & 10 \text { units at } \$ 70 \\\hline \text { March } 10 & \text { Sold } 8 \text { units } \\\hline \text { June } 10 & \text { Purchased } 20 \text { units at } \$ 80 \\\hline \text { October 30 } & \text { Sold } 15 \text { units } \\\hline\end{array}$$
- What would the company's Cost of goods sold be on the December 31,2013 income statement if the perpetual First-In,First-Out costing method is used? (Answers are rounded to the nearest dollar.)

• A) $1,760
• B) $1,610
• C) $1,740
• D) $1,840

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Definitions:

Gross Investment

The total amount invested in the purchase of new capital assets plus replacement of depreciated assets, reflecting the total expenditure on new capital in an economy.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decrease in value over time due to wear and tear or obsolescence.

Net Investment

The overall sum invested by a company or an economy in capital assets, with depreciation deducted.

Depreciation

Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life, representing how much of the asset's value has been used up.