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
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...
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Question
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
a. £33,000
b. £41,500
c. £40,000
d. £32,000
e. £1,000
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