Wakefield Company Uses a Perpetual Inventory System

question 61

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 to record the replacement of the 1,500 units in November,Cost of Goods Sold will be debited for:

• A)$52,500.
• B)$22,500.
• C)$15,000.
• D)$7,500.

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Definitions:

Sales Growth

The increase in sales over a specific period, indicating the financial health and expansion rate of a company.

Required Return

The least annual profit percentage that attracts firms or individuals to place investments in a specific security or project.

Dividend Yield

A ratio reflecting the yearly dividend payments of a company as a proportion of its stock price.

Stock Price

Stock price is the current market price at which a share of stock can be bought or sold, reflecting the value that the market assigns to a company.