A Company Had the Following Purchases and Sales During Its

question 200

Multiple Choice

A company had the following purchases and sales during its first year of operations: On December 31,there were 26 units remaining in ending inventory.
-Using the perpetual FIFO inventory costing method,what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)

• A)$8,670.
• B)$3,540.
• C)$5,400.
• D)$5,130.
• E)$3,270.

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Definitions:

Capitalize

The act of recording a cost or expense on the balance sheet for purposes of delaying full recognition of the expense over time through depreciation or amortization.

Amortize

To gradually write off the initial cost of an intangible asset over its useful life, reflecting the consumption of the asset's value.

Capital Assets

Long-term tangible or intangible assets owned or controlled by a business that are used to produce goods or services and are not intended for sale in the regular course of business.

Equity Method

An accounting technique used for recording investments in associate companies where the investment is represented by the equity value.