Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

During October, a retailer bought inventory as follows: 5 Oct: $50$ units costing $500$ each. 12 Oct: $50$ units costing $500$ each. 23 Oct: $150$ units costing $525$ each. At the start of October, there was no opening inventory. The business values inventory using the first-in first-out (FIFO) method. In October, $200$ units were sold at $900$ each. What gross profit was earned in October?

  • A$76\,667
  • B$77\,000
  • C$77\,500
  • D$96\,250

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