Wakefield Company Uses a Perpetual Inventory System

question 27

Multiple Choice

Wakefield Company uses a perpetual inventory system.In August,it sold 2,000 units from its LIFO-base inventory,which had originally cost $35 per unit.The replacement cost is expected to be $45 per unit.The company is planning to reduce its inventory and expects to replace only 1,500 of these units by December 31,the end of its fiscal year.The company replaced 1,500 units in November at an actual cost of $50 per unit.
-Based on the preceding information,in the entry in August to record the sale of the 2,000 units:

• A)Cost of Goods Sold will be debited for $70,000.
• B)Inventory will be credited for $85,000.
• C)Excess of Replacement Cost over LIFO Cost of Inventory Liquidation will be credited for $15,000.
• D)Excess of Replacement Cost over LIFO Cost of Inventory Liquidation will be credited for $67,000.

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Definitions:

Cycloaddition

A chemical reaction in which two or more unsaturated molecules (or parts of the same molecule) combine to form a cyclic product.

HOMO/LUMO Interaction

Refers to the interaction between the Highest Occupied Molecular Orbital (HOMO) of one molecule and the Lowest Unoccupied Molecular Orbital (LUMO) of another molecule, important in determining the outcome of chemical reactions.

Cycloocta-1,5-diene

A cycloalkene with eight carbon atoms and two double bonds located at the first and fifth positions.

Stereochemistry

A branch of chemistry concerned with understanding and describing the three-dimensional arrangement of atoms within molecules, particularly focusing on isomers.