Testbank Multiple Choice Question 99 The following information was available from the inventory records of Waterway Industries for January: Units Unit Cost Total Cost Balance at January 1 8800 $9.80 $86240 Purchases: January 6 5800 10.22 59276 January 26 8000 10.76 86080 Sales January 7 (7700 ) January 31 (11000 ) Balance at January 31 3900 Assuming that Waterway maintains perpetual inventory records, what should be the inventory at January 31, using the moving-average inventory method, rounded to the nearest dollar? (Round average cost per unit to 3 decimal places, e. g. 1.485.) $40054. $39965. $40533. $40655.

Which of the following statements is correct? large corporations are taxed more favorably than sole proprietorships. corporate stockholders are exposed to unlimited liability. due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of u.s. businesses (in terms of number of businesses) are organized as corporations. most businesses (by number and total dollar sales) are organized as partnerships or proprietorships because it is easier to set up and operate in one of these forms rather than as a corporation. however, if the business gets very large, it becomes advantageous to convert to a corporation, mainly because corporations have important tax advantages over proprietorships and partnerships. most business (measured by dollar sales) is conducted by corporations in spite of large corporations’ often less favorable tax treatment, due to legal considerations related to ownership transfers and limited liability.

Actual usage for the year by the marketing department was 70,000 copies and by the operations department was 330,000 copies. if a dual-rate cost-allocation method is used, what amount of copying facility costs will be budgeted for the operations department?

Read the following scenario and answer the question in 5-10 sentences. you are the owner of a small business that is a defendant in a lawsuit in federal court. you received bad news from your lawyer that the judge did not allow certain documents to be admitted as evidence in court and that the jury reached a $50,000 verdict in favor of the plaintiff. your lawyer tells you that it is within your legal right to hire him to file an appeal with the united states court of appeals. if the appellate court rules in your favor, you may be able to avoid paying part or all of the $50,000. evaluate your lawyer’s suggestion about appealing the decision.