A Company Uses a Perpetual Inventory System, and Follows GAAP

question 175

Multiple Choice

A company uses a perpetual inventory system, and follows GAAP in preparing its external financial statements. At the end of 2002, the balance in the inventory account was $66,000; $6,000 of those goods were purchased f.o.b. shipping point and did not arrive until 2013. Purchases in 2013 were $30,000. The perpetual inventory showed an ending inventory of $72,000 for 2013. A physical count of the goods on hand at the end of 2013 showed an inventory of $60,000. What should the company report on its 2013 income statement for cost of goods sold?

• A) $24,000
• B) $30,000
• C) $36,000
• D) $42,000

Understand percentage calculations and apply them to determine parts of a whole in various contexts.

Analyze real-world scenarios to calculate total sales, revenue, or expenditure based on given percentages.

Calculate the change in quantities, such as time or salary, resulting from percentage increases or decreases.

Identify the percentage composition of different categories within a total amount to analyze financial distributions.

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Definitions:

Progress Report

A document or update that provides stakeholders with information on the current status of a project, including what has been completed, what is in progress, and any issues encountered.

As-Needed Basis

A condition or situation in which actions are taken or resources are used only when required.

Appendix

An additional section at the end of a book or document, providing extra information, tables, or references not included in the main text.

Additional References

Additional references are supplementary materials or sources cited to support, clarify, or augment the information presented in a document, presentation, or research.