McCarthy Company Has Inventory of 8 Units at a Cost

question 101

Multiple Choice

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what is the value of inventory after the October 4 sale?

• A)$3,485.
• B)$3,445.
• C)$3,500.
• D)$3,472.
• E)$3,461.

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Definitions:

Foreign Currency Option

A financial derivative that gives the holder the right, but not the obligation, to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specific date.

Right

In finance, typically refers to a contractual entitlement to purchase additional shares at a specified price before a certain date, often associated with share issuance.

Obligation

A legal or financial duty or responsibility to make payments, fulfill contracts, or otherwise perform as agreed.

Forward Contract

A customized contract between two parties to buy or sell an asset at a specified price on a future date, used to hedge or speculate on the price movement of the underlying asset.