ACME Company purchases for resale 1,000 widgets for $64 each. At year-end, the replacement cost is $63 per widget, the estimated selling price is $68 per widget, the disposal cost is $7 per widget, and the estimated markup is $10 per widget. If ACME uses LCM costing by item, at what amount will the widgets be reported on the balance sheet? a. $63,000 b. $51,000 c. $64,000 d. $62,500 e. $61,000

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
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Chapter7: Budgeting
Section: Chapter Questions
Problem 11EB: Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase,...
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ACME Company purchases for resale 1,000 widgets for $64 each. At year-end, the replacement
cost is $63 per widget, the estimated selling price is $68 per widget, the disposal cost is $7 per
widget, and the estimated markup is $10 per widget.
If ACME uses LCM costing by item, at what amount will the widgets be reported on the balance
sheet?
a. $63,000
b. $51,000
c. $64,000
d. $62,500
e. $61,000
Transcribed Image Text:ACME Company purchases for resale 1,000 widgets for $64 each. At year-end, the replacement cost is $63 per widget, the estimated selling price is $68 per widget, the disposal cost is $7 per widget, and the estimated markup is $10 per widget. If ACME uses LCM costing by item, at what amount will the widgets be reported on the balance sheet? a. $63,000 b. $51,000 c. $64,000 d. $62,500 e. $61,000
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