Several finished products are listed in the inventory account. One such product, X444, is carried at the cost of $300,000 and consists of 10,000 units The sales manager informs the financial director that x444 has become obsolete and can only be sold for $5 per unit. The plant manager informs the financial director that for an additional $7.50 per unit, X444 can be updated and sold for $12 per unit. if you were the financial director, your decision would be Answers A-D A to sell the whole lot for $50.000 and record an accounting loss for $250,000 B to update X444 at the additional cost of $75,000 and sell the lot for $120,000 C to record the current value of the lot to be $125,000 (ie, ($5.00+ $7.50)/unit). Oto wait for a better alternative to be proposed in due course.

Several finished products are listed in the inventory account. One such product, X444, is carried at the cost of $300,000 and consists of 10,000 units The sales manager informs the financial director that x444 has become obsolete and can only be sold for $5 per unit. The plant manager informs the financial director that for an additional $7.50 per unit, X444 can be updated and sold for $12 per unit. if you were the financial director, your decision would be Answers A-D A to sell the whole lot for $50.000 and record an accounting loss for $250,000 B to update X444 at the additional cost of $75,000 and sell the lot for $120,000 C to record the current value of the lot to be $125,000 (ie, ($5.00+ $7.50)/unit). Oto wait for a better alternative to be proposed in due course.

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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