Use the Following Information for the Following Questions:
the Following

question 85

Multiple Choice

Use the following information for the following questions:
The following information was available from the inventory records of Key Company for January:
$$\begin{array} { c l l l } & \text { Units } & \text { Unit Cost } & \text { Total Cost } \\\text { Balance at January } 1 & 3,000 & \mathbf { \$ 9 . 7 7 } & \mathbf { \$ 2 9 , 3 1 0 } \\\text { Purchase: } & & & \\\text { January } 6 & 2,000 & 10.30 & \mathbf { 2 0 , 6 0 0 } \\\text { January } 26 & 2,700 & 10.71 & \mathbf { 2 8 , 9 1 7 } \\\text { sales: } & & & \\\text { January } 7 & ( 2,500 ) & & \\\quad \text { January } 31 &\underline{( 4,200 ) } & &\\\text { Balance at January } &\underline{1,000}&& \end{array}$$
-Assuming that Key uses the perpetual inventory system, what should the inventory be at January 31, using the moving-average inventory method, rounded to the nearest dollar?

• A) $10,237
• B) $10,260
• C) $10,360
• D) $10,505

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Definitions:

Total Asset Turnover Ratio

A financial metric used to assess a company's efficiency in using its assets to generate sales or revenue.

Net Fixed Assets

The value of a company's fixed assets minus depreciation, representing the actual value of the assets in use.

Financial Leverage

The use of borrowed money (debt) to amplify potential returns from an investment or project.

Sustainable Growth Rate

The maximum growth rate a company can achieve without having to increase its financial leverage or debt.