Charles Scrab Inc

question 56

Multiple Choice

Charles Scrab Inc. has beginning inventory of $15,000, purchases of $25,000, and ending inventory of $10,000, sales of $75,000, operating expenses of $30,000, and a tax rate of 40% for 2008. An accounting clerk input the ending inventory as $12,000. What is the effect on 2008 cost of goods sold?

• A)Cost of Goods Sold will be $1,200 higher.
• B)Cost of Goods Sold will be $1,200 lower.
• C)Cost of Goods Sold will be $2,000 higher.
• D)Cost of Goods Sold will be $2,000 lower.

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Definitions:

Fair Adjustment

An equitable modification or change made to resolve a dispute or correct an imbalance.

Inconvenience

A minor annoyance or difficulty that causes discomfort or trouble, often disrupting plans or activities.

Anger

A strong feeling of displeasure or hostility triggered by what is perceived as wrong, injustice, or frustration.

Good-News Letter

A communication sent to share positive information, news, or updates with the recipient.