Colonial Uses the Retail Method to Estimate Its Monthly Cost

question 46

Multiple Choice

Colonial uses the retail method to estimate its monthly cost of goods sold and month-end inventory.At August 31,the accounting records indicate the cost of goods available for sale during the month (beginning inventory plus purchases) totaled $270,000.These goods had been priced for resale at $675,000.Sales in August totaled $450,000.The estimated inventory at August 31 is:

• A)$48,000.
• B)$90,000.
• C)$120,000.
• D)$270,000.

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Definitions:

Convertible Bond

A type of bond that can be converted into a predetermined amount of the issuing company's equity at certain times during its life, usually at the discretion of the bondholder.

Conversion Price

The predetermined price at which convertible security, such as a convertible bond or preferred stock, can be converted into a specified number of shares of common stock.

Conversion Value

The financial value of a convertible security if it is converted into a different form, typically shares of the issuing company's stock.

Call Option Contracts

Financial contracts that give the holder the right, but not the obligation, to buy an asset at a specified price within a specific time frame.