Morton Enterprises sells a single product which it buys from various manufacturers. It has a December 31 fiscal year end. During 2020, its first year of operations, purchases of this item were as follows: On December 31, 2020, 7,800 of these items are still on hand. Their replacement cost on this date is $24.00 and they are being sold for $31.00. It is estimated that selling costs average 20 percent of the sales price. It is not possible to identify the individual items being sold. Calculate all the values that could be used for the 7,800 remaining units for tax purposes, identifying the method you used for each value.

Question

Morton Enterprises sells a single product which it buys from various manufacturers. It has a December 31 fiscal year end. During 2020, its first year of operations, purchases of this item were as follows:  On December 31, 2020, 7,800 of these items are still on hand. Their replacement cost on this date is $24.00 and they are being sold for $31.00. It is estimated that selling costs average 20 percent of the sales price. It is not possible to identify the individual items being sold. Calculate all the values that could be used for the 7,800 remaining units for tax purposes, identifying the method you used for each value.

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The Answer of Morton Enterprises sells a single product which it buys from various manufacturers. It has a December 31 fiscal year end. During 2020, its first year of operations, purchases of this item were as follows:  On December 31, 2020, 7,800 of these items are still on hand. Their replacement cost on this date is $24.00 and they are being sold for $31.00. It is estimated that selling costs average 20 percent of the sales price. It is not possible to identify the individual items being sold. Calculate all the values that could be used for the 7,800 remaining units for tax purposes, identifying the method you used for each value.

Morton Enterprises Sells a Single Product Which It Buys from Various