Biscuit Bakery Had the Following Activity in Its Inventory Account

question 49

Multiple Choice

Biscuit Bakery had the following activity in its inventory account during August 20X3. $\begin{array}{lllcc}\text { Date } & \text { Activity } & \text { Units } & \begin{array}{c}\text { Cost per } \\\text { Unit Cost }\end{array} & \text { Total } \\\hline \text { August 1 } & \text { Beginning inventory } & 100 & \$ 3.00 & \$ 300 \\\text { August 3 } & \text { Purchase } & 40 & 3.10 & 124 \\\text { August 7 } & \text { Sale } & 50 & & \\\text { August 12 } & \text { Purchase } & 50 & 3.20 & 160 \\\text { August 16 } & \text { Sale } & 70 & & \\\text { August 23 } & \text { Sale } & 40 & & \\\text { August 30 } & \text { Purchase } & 60 & 3.30 & 198\end{array}$ What is the ending inventory balance at August 31,20X3,for Biscuit Bakery if the company uses perpetual FIFO as its inventory valuation method?

• A)$198.00
• B)$270.00
• C)$294.00
• D)$297.50
• E)$358.00

Recognize differences between U.S. GAAP and IFRS in terms of income statement presentation and comprehensive income.

Apply the matching principle to determine appropriate expense recognition.

Understand the requirements for reporting valuation changes in various liabilities and assets under both U.S. GAAP and IFRS.

Grasp the concept of other comprehensive income (OCI) and its reporting requirements.

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Definitions:

Implied in Fact Contracts

Contracts arising from the conduct of the parties, indicating a mutual intention to contract, without explicit verbal agreement.

Quasi Contract

An obligation imposed by law to prevent unjust enrichment, even though no actual agreement exists between the parties involved.

Obligation Imposed

A duty or responsibility enforced by law, regulation, or agreement.

Contract Formation

The process whereby parties agree upon and establish the terms of a contract, leading to a binding legal agreement.