Determine the Amount of Inventory on the Balance Sheet of a Manufacturing

question 108

Multiple Choice

Determine the amount of inventory on the balance sheet of a manufacturing company from the following account balances: Finished goods $24,000 Merchandise inventory $50,000
Raw materials 30,000 Work in process 6,000

• A)$24,000
• B)$60,000
• C)$74,000
• D)$104,000

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Definitions:

Depreciation Rates

Depreciation rates are percentages or methods used to systematically reduce the carrying value of a tangible or fixed asset over its useful life.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, representing the reduction in value due to wear and tear, age, or obsolescence.

Double-Declining Balance

A method of accelerated depreciation where an asset's value decreases by twice the rate of traditional straight-line depreciation.

Straight-Line Depreciation

A process for dividing the expenditure of a tangible resource into consistent annual portions throughout its service life.