A Company Had the Following Purchases During Its First Year

question 14

Multiple Choice

A company had the following purchases during its first year of operations: On December 31,there were 26 units remaining in ending inventory.These 26 units consisted of 2 from January,4 from February,6 from May,4 from September,and 10 from November.Using the specific identification method,what is the cost of the ending inventory?

• A)$3,500.
• B)$3,800.
• C)$3,960.
• D)$3,280.
• E)$3,640.

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Definitions:

Bank Certificates

Short for "bank certificates of deposit (CDs)," which are time-deposit financial products offered by banks with fixed interest rates and maturity dates.

Money Market Funds

Investment funds that invest in short-term debt securities, offering high liquidity with a relatively low level of risk.

Restricted Cash

Cash that is not available for immediate use because it is reserved for a specific purpose.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.