Williams Inc

question 49

Multiple Choice

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

• A)$750
• B)$1,140
• C)$1,200
• D)$1,950

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Definitions:

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee but does not fully control it.

Effective Income Tax Rate

The mean rate at which a person or company is taxed, determined by dividing the total amount of tax owed by the taxable income.

Net Income

The amount of profit left over after all operating expenses, taxes, and interest payments are deducted from total revenue. It is a key indicator of a company's profitability.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.