Mercado Ltd started its business with £21,000 in cash on 1 Jan 20X1, and immediately purchased 400 items of inventory at the price of £50 per item and put the remaining £1,000 in a bank account without any fees or interests. On 1 July 20X1, it sold all items at the price of £80 per item and received the payment in cash. The general price index during the year was as follows: 01-Jan 01-Jul 31-Dec General price index 100 120 150 What is the cash balance at the year end 31 Dec 20X1 under current purchasing power accounting? a. £33,000 b. £41,500 c. £40,000 d. £32,000 e. £1,000

Mercado Ltd started its business with £21,000 in cash on 1 Jan 20X1, and immediately purchased 400 items of inventory at the price of £50 per item and put the remaining £1,000 in a bank account without any fees or interests. On 1 July 20X1, it sold all items at the price of £80 per item and received the payment in cash. The general price index during the year was as follows: 01-Jan 01-Jul 31-Dec General price index 100 120 150 What is the cash balance at the year end 31 Dec 20X1 under current purchasing power accounting? a. £33,000 b. £41,500 c. £40,000 d. £32,000 e. £1,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...

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