Use This Inventory Information for the Month of September to Answer

question 151

Multiple Choice

Use this inventory information for the month of September to answer the following question. $\begin{array}{rlll}\text { Sept. } &1& \text { Beginning inventory } & 10 \text { units @ } \$ 120 \\&5 & \text { Purchase } & 60 \text { units @ } \$ 112 \\&14 & \text { Sale } & 40 \text { units } \\&21 & \text { Purchase } & 30 \text { units @ } \$ 116 \\&30 & \text { Sale } & 28 \text { units }\end{array}$
Assuming that a perpetual inventory system is used,what is ending inventory on a FIFO basis?

• A) $3,704
• B) $7,696
• C) More information is needed.
• D) $3,664

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Definitions:

Earnings Per Share

A financial metric calculating the portion of a company's profit allocated to each outstanding share of common stock.

Preferred Stock Dividends

Payments made to preferred shareholders, typically fixed, that take priority over common stock dividends.

Cumulative Preferred Stock

A type of preferred stock where dividends must be paid, including any arrears, before any dividends can be distributed to common shareholders.

Retained Earnings

The portion of net income that is retained by the company rather than distributed to its shareholders as dividends, used for reinvestment in the business or to pay off debt.