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Zina [86]
2 years ago
15

Stubbs Company uses the perpetual inventory method. On January 1, Year 1, Stubbs purchased 400 units of inventory that cost $8.0

0 each. On January 10, Year 1, the company purchased an additional 600 units of inventory that cost $9.00 each. If Stubbs uses a weighted average cost flow method and sells 700 units of inventory for $16.00 each, the amount of gross margin reported on the income statement will be:
A. $5,180.
B. $5,250.
C. $5,000.
D. $6,020.

Business
1 answer:
Sonja [21]2 years ago
3 0

Answer:

A. USD 5,180/-

Explanation:

In the actual method of inventory valuation, the inventory reaming and the COGS (Cost Of Goods Sold) is measured after each purchase or sale of a  transaction. So the COGS and the remaining value of the inventory is known all the time.

Formula:

  • Gross margin is equal to Sales minus COGS

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So, this explains the answer.

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Susan, a district manager for a large retail chain, is comparing the goals of her stores with recent sales. She knows that two s
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3 years ago
On December 1 of Year 1, Jones, a self-employed cash basis taxpayer, took out a loan to use in her business. The loan principal
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3 years ago
How is the balance sheet used to record amortization and why might it be useful as coupon payments are made?
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Answer:

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Explanation:

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