A refinery buys 10 million barrels of crude oil at a market price of $60 per...
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A refinery buys 10 million barrels of crude oil at a market price of $60 per barrel on 11th August 20X1. Having processed the oil, the refinery sells its final products in October 20X1 for an average price of $78 per barrel, when the average market price of crude oil is $65 per barrel. Which of the following statements about current replacement cost accounting is/are correct: (1) A holding loss of $50 million is realised on the sale. (ii) Replacement cost profit of $180 million is made on the sale. (iii) The capital maintenance adjustment is $130 million. Select one: O a. (ii) and (iii) O b. (ii) only Oc. No statement is correct O d. (iii) only O e. (i) and (ii) Of. (i) only Og. (i) and (iii) A refinery buys 10 million barrels of crude oil at a market price of $60 per barrel on 11th August 20X1. Having processed the oil, the refinery sells its final products in October 20X1 for an average price of $78 per barrel, when the average market price of crude oil is $65 per barrel. Which of the following statements about current replacement cost accounting is/are correct: (1) A holding loss of $50 million is realised on the sale. (ii) Replacement cost profit of $180 million is made on the sale. (iii) The capital maintenance adjustment is $130 million. Select one: O a. (ii) and (iii) O b. (ii) only Oc. No statement is correct O d. (iii) only O e. (i) and (ii) Of. (i) only Og. (i) and (iii)
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Related Book For
Corporate Financial Accounting
ISBN: 978-1133952411
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
Posted Date:
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