Answer:
d. 1,249,500
Explanation:
Hay Company had January 1 inventory of $300,000 when it adopted dollar-value LIFO. During the year, purchases were $1,800,000 and sales were $3,000,000. December 31 inventory at year-end prices was $379,500, and the price index was 110.
Profit can be calculated as follow :
Revenue = $300,000
Purchase = $1,800,000
Sales = $3,000,000
Price index = 110
Using the formula :
Hay Company’s gross profit = 3000,000 - [{($300,000 * 110%) + $1800,000} - $379,500]
= 3000000 - [(330000 + 1800000) - 379500]
= 300000 - 1750500
= 1249500
Hence, option D is correct.
Answer:
d. 1,249,500
Explanation:
Gross profit of the period
Sales revenue
3000000
Less: cost of goods Sold
Beginning inventory. 300000
Add: purchase. 1800000
To cost of goods available for sale 900000
Less: ending inventory. 369500
Cost of Goods sold 1750500
Gross profit of the period. 1249500
Therefore, the gross profit hay company during that period is given as 1,249,500 with step by step solution written in the above table.
