Cornerstone, Inc. has $143,000 of inventory that suffered minor smoke damage from a fire in the warehouse.
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Question:
Cornerstone, Inc. has $143,000 of inventory that suffered minor smoke damage from a fire in the warehouse. The company can sell the goods "as is" for $56,000; alternatively, the goods can be cleaned and shipped to the firm's outlet center at a cost of $23,000. There the goods could be sold for $98,000. What alternative is more desirable and what is the relevant cost for that alternative?
Multiple Choice Sell "as is,' $143,000 Clean and ship to outlet center, $23,000Clean and ship to outlet center, $121,000.
Clean and ship to outlet center, $166,000.
Neither alternative is desirable, as both produce a loss for the firm.
Related Book For
Concepts in Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
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