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Ad libitum [116K]
3 years ago
13

A physical inventory on December 31 shows 4,000 units on hand. Eneri sells the units for $13 each. The company has an effective

tax rate of 20%. Eneri uses the periodic inventory method. If the company uses FIFO, what is the gross profit for the period?
Business
2 answers:
adoni [48]3 years ago
7 0

Answer:

Gross profit is $42,000

Explanation:

stira [4]3 years ago
4 0

<em>Answer</em>:

<u>$52,000</u>

Explanation:

Remember, the FIFO inventory costing method records the inventory value based on the cost of the earliest (first) purchased or in hand balance.

The effective tax rate would usually be applied after the sales, however using FIFO we assume the first value of the inventory prior to the tax deduction.

= 4000 x $13

= $52,000

Therefore, the gross profit for the period is $52,000.

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