Williams Company Had the Following Balances and Transactions During 2014

question 125

Multiple Choice

Williams Company had the following balances and transactions during 2014. Williams maintains its records of inventory on a perpetual basis using the FIFO method. Calculate the amount of ending Merchandise Inventory at December 31, 2014 using the lower-of-cost-or-market rule.

• A)$1,200
• B)$1,360
• C)$2,040
• D)$1,020

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Definitions:

Sum-Of-The-Years-Digits

A depreciation method that results in a more accelerated write-off of assets than the straight-line method, involving adding the digits of the years of an asset's useful life.

Heavy Equipment

Large machinery used in construction, mining, and manufacturing, essential for executing large-scale tasks.

Sum-Of-The-Years-Digits

A method of accelerated depreciation where the asset’s cost is multiplied by a sequence of fractions representing the sum of the years’ digits.

Resale Value

Resale value is the expected amount that an asset or item will sell for in the future after accounting for depreciation.