Forge Company,a Calendar-Year Entity,had 6,000 Units in Its Beginning Inventory

question 16

Multiple Choice

Forge Company,a calendar-year entity,had 6,000 units in its beginning inventory for 2008.On December 31,2007,the units had been adjusted down to $470 per unit from an actual cost of $510 per unit.It was the lower of cost or market.No additional units were purchased during 2008.The following additional information is provided for 2008:
Forge does not have sufficient experience with the seasonal market for its inventory units and assumes that any reductions in market value during the year will be permanent.

-Based on the preceding information,the cost of goods sold for the year 2008,is:

• A)$2,080,000
• B)$1,880,000
• C)$1,835,000
• D)$1,910,000

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Definitions:

Bound Agreement

A legally binding contract or arrangement between parties.

Illusory Promise

An agreement that lacks a true commitment from the promisor, making it unenforceable as a contract.

Accord

An agreement between parties to settle a dispute or obligation.

Satisfaction

The fulfilment of a requirement, payment of a debt, or resolution of a claim.