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On October 31, 2011, CPA Co. borrowed $16 million cash and issued a 7-month, noninterest-bearing...

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Accounting

On October 31, 2011, CPA Co. borrowed $16 million cash and issued a 7-month, noninterest-bearing note. The loan was made by The Finance Co. whose stated discount rate is 8%. CPA's effective interest rate on this loan is:

More than the stated discount rate of 8%.
Less than the stated discount rate of 8%.
Equal to the stated discount rate of 8%.
Unrelated to the stated discount rate of 8%.

Nova Co. has used the dollar-value LIFO retail method since it began operations in early 2011 (its base year). Its beginning inventory for 2012 was $36,000 at cost and $72,000 at retail prices. At the end of 2012, it computed its estimated ending inventory at retail to be $120,000. Assuming its cost-to-retail percentage for 2012 transactions was 60%, what is the inventory balance that Nova Co. would report in its 12/31/12 balance sheet?

$64,800
$72,000
$120,000
It can't be determined with the given information

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