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prohojiy [21]
3 years ago
15

RF Company had January 1 inventory of $150,000 when it adopted dollar-value LIFO. During the year, purchases were $900,000 and s

ales were $1,500,000. December 31 inventory at year-end prices was $215,040, and the price index was 112. What is RF Company's gross profit?
A. $642,000
B. $647,040
C. $1,302,960
D. $665,190
Business
1 answer:
lorasvet [3.4K]3 years ago
8 0

Answer:

Gross profit = $647,040

so correct option is B. $647,040

Explanation:

given data

inventory = $150,000

purchases = $900,000

sales = $1,500,000

inventory end prices = $215,040

price index = 112

to find out

RF Company's gross profit

solution

at 31st December  base year inventory prices will be  

base year inventory prices = \frac{215040}{1.12}

base year inventory prices = $192,000

and

now Changes in inventory from beginning will be here as

Changes in inventory from beginning = $192000- $150000

Changes in inventory from beginning = $42,000

so as that 31st December as LIFO

inventory at dollar value is  = $150000 × 100% + $42000 × 112%

inventory at dollar value  = $150000 + 47040

inventory at dollar value  = $197,040

so

Cost of goods sold will be here as

Cost of goods sold = beginning inventory + purchases - ending inventory    .........................1

put here value

Cost of goods sold = $150,000 + $900,000 - $197,040

Cost of goods sold =  $852,960

so Gross profit  will be here

Gross profit = sales - cost of goods sold .........................2

put here value

Gross profit = $1500000 - $852960

Gross profit = $647,040

so correct option is B. $647,040

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Which of the following statements about Treasury bonds is the most accurate? Treasury bonds are completely riskless. Treasury bo
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Coronado Corporation had net sales of $2,409,000 and interest revenue of $35,100 during 2020. Expenses for 2020 were:
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Answer:

                            Coronado Corporation

                  Income statement for the year 2020

                                                       $                  $

Net Sales                                   2,409,000

Interest Revenue                      <u>35,100    </u>

Total income                                               2,409,000

Cost of goods sold                                      <u>(1,452,700)</u>

Gross Income                                                 956,300

Operating Expense

Administrative expenses          215,700

Selling expenses                       <u>287,700</u>

Total Operating Expenses                          (<u>503,400)</u>

Operating Income                                          452,900

Interest expense                                           <u>  (49,800)</u>

Income before Tax                                          403,100

Tax rate 30%                                                   <u> 120,930</u>

Net Income                                                      <u>282,170</u>

Explanation:

Sales and Interest revenue are from the revenue section and totalling them we get total income. After deducting cost of goods sold we have gross income. From here we will subtract operating expenses from gross income to reach at operating income. after deducting interest and tax expenses we can have net income for the year.

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