A refinery buys 15 million barrels of crude oil at a market price of $40 per barrel on11th August 20X1. Having processed the oil, the refinery sells its final products in October 20X1 for an average price of $50 per barrel, when the average market price of crude oil is $44 per barrel. Which of the following statements about current replacement cost accounting is/are correct: (i) Replacement cost profit of $150 million is made on the sale. (ii) The capital maintenance adjustment is $90 million. (iii) Cost of sales is $600 million. a. (i) and (iii) b. (i) and (ii) c. (ii) and (iii) d. (i) only e. No statement is correct f. (ii) only g. (iii) only

A refinery buys 15 million barrels of crude oil at a market price of $40 per barrel on11th August 20X1. Having processed the oil, the refinery sells its final products in October 20X1 for an average price of $50 per barrel, when the average market price of crude oil is $44 per barrel. Which of the following statements about current replacement cost accounting is/are correct: (i) Replacement cost profit of $150 million is made on the sale. (ii) The capital maintenance adjustment is $90 million. (iii) Cost of sales is $600 million. a. (i) and (iii) b. (i) and (ii) c. (ii) and (iii) d. (i) only e. No statement is correct f. (ii) only g. (iii) only

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 63P

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