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Pie
3 years ago
11

Lemon company purchased 100 units for $20 each on January 31. It purchased 200 units for $30 each on February 28. It sold 200 un

its for $50 each from March 1 through December 31. If the company uses the first-in, first-out inventory costing method, what is the amount of Cost of Goods Sold on the income statement for the year ending December 31?
A. ​$6,350.
B. ​$4,350.
C. ​$1,600.
D. ​$4,750.
Business
1 answer:
Natali [406]3 years ago
4 0

Answer:

Find detailed explanations below

Explanation:

Under the first-in-first-out inventory valuation method, the earlier stocks are sold first and the latest stocks remain in inventory.

In essence, the 200 units sold comprise of 100 units purchased on January 31  at $20 each  and 100 units from purchases made on February 28 at $30 each as computed below

Cost of goods sold=(100*$20)+(100*$30)

Cost of goods sold=$5,000(the options are wrong)

The correct question for the options is provided below:

A company purchased 80 units for​ $20 each on January 31. It purchased 190 units for​ $25 each on February 28. It sold 190 units for​ $80 each from March 1 through December 31. If the company uses the​ first-in, first-out inventory costing​ method, what is the amount of Cost of Goods Sold on the income statement for the year ending December​ 31? (Assume that the company uses a perpetual inventory​ system.)

A.

​$6,350

B.

​$4,350

C.

​$1,600

D.

​$4,750

Cost of goods sold=(80*$20)+(110*$25)

Cost of goods sold=$4,350

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given data

market risk premium = 6.0%

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Beta                                                1.10                                    0.90

Constant growth rate                    7 %                                     7%

to find out

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solution

we get here Stock A rA = 6.4% + 1.1 × 6%

Stock A rA  = 13.00%

and

Dividend yield of stock A = rA - g

Dividend yield of stock A = 13.00% - 7%

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