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ACME Company purchases for resale 1,000 widgets for $38 each. At year-end, the replacement cost is $37 per widget, the estimated selling price is $63 per widget, the disposal cost is $8 per widget, and the estimated markup is $15 per widget. If ACME uses LCM costing by item, at what amount will the widgets be reported on the balance sheet? a. $39,000 b. $37,000 c. $55,000 d. $40,000 e. $38,000

ACME Company purchases for resale 1,000 widgets for $38 each. At year-end, the replacement cost is $37 per widget, the estimated selling price is $63 per widget, the disposal cost is $8 per widget, and the estimated markup is $15 per widget. If ACME uses LCM costing by item, at what amount will the widgets be reported on the balance sheet? a. $39,000 b. $37,000 c. $55,000 d. $40,000 e. $38,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ACME Company purchases for resale 1,000 widgets for $38 each. At year-end, the replacement cost is $37 per widget, the estimated selling price is $63 per widget, the disposal cost is $8 per widget, and the estimated markup is $15 per widget. If ACME uses LCM costing by item, at what amount will the widgets be reported on the balance sheet? a. $39,000 b. $37,000 c. $55,000 d. $40,000 e. $38,000
Transcribed Image Text:ACME Company purchases for resale 1,000 widgets for $38 each. At year-end, the replacement cost is $37 per widget, the estimated selling price is $63 per widget, the disposal cost is $8 per widget, and the estimated markup is $15 per widget. If ACME uses LCM costing by item, at what amount will the widgets be reported on the balance sheet? a. $39,000 b. $37,000 c. $55,000 d. $40,000 e. $38,000
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