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17) Handbags, Inc. had 400 units of inventory on hand at the end of the vear. These were recorded at a cost of $14 each using
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Answer #1

C) Credited by $1,600.

cost of inventory $14 each

Replacement cost $10 per unit

Loss per unit $4(14-10)

No. of units = 400

Hence, reduction in value = 400*4 = $1,600.

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