Holliday Company's inventory records show the following data:
|Inventory, January 1||5,000||$9.00|
A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method.
Under the FIFO method, the December 31 inventory is valued at:
In financial accounting, inventory valuation plays a significant role in valuing inventory. Accordingly, in practice, we use four methods of inventory valuation naming as the specific identifications, FIFO, LIFO, and weighted average method.
Answer and Explanation: 1
The correct answer is option a. $14,000.
Based on the information above, the total remaining inventory on hand is 2,000 units. Take note that if...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 6 / Lesson 11
Inventory valuation methods are ways that companies place a monetary value on the items they have in their inventory. Discover different inventory valuation methods, including specific identification, First-In-First-Out (FIFO), Last-In-First-Out (LIFO), and weighted average.