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Entity HJ is a small business. In the period. Entity Hj earned revenue of 24,300, had opening inventories of 1,500 and closing inventories of 8,000. Purchases came to 13,200.
What was Entity Hj's gross profit or loss for this period?
Suggested Answer: B
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35 comments · newest first
AL
Allene
11 months ago
I thought losses were more common for small businesses.
YE
Yesenia
11 months ago
Definitely 17,600 profit!
ZA
Zack
11 months ago
Wait, how can there be a profit with those numbers?
JO
Jolanda
12 months ago
I think it’s a profit, right?
LI
Linn
12 months ago
Gross profit is calculated as revenue minus cost of goods sold.
TI
Timmy
12 months ago
I’m leaning towards option A, but I’m not completely confident. I hope I remember the inventory calculations correctly!
AB
Abraham
1 year ago
I feel like the gross profit should be revenue minus cost of goods sold, but I’m confused about how to apply the numbers here.
DO
Dominga
1 year ago
I remember a similar question where we had to adjust for opening and closing inventories. I think we subtract the closing inventory from the sum of opening inventory and purchases.
LU
Luis
1 year ago
I think we need to calculate the cost of goods sold first, but I'm not entirely sure how to do that with the inventories.
GR
Gracie
1 year ago
Okay, let me think this through. If the opening inventory was 1,500, the purchases were 13,200, and the closing inventory was 8,000, then the cost of goods sold must be 6,700. So the gross profit would be 24,300 - 6,700 = 17,600. I think I've got it!
CH
Chanel
1 year ago
No problem, I've got this. The key is to remember the basic formula: Revenue - Cost of Goods Sold = Gross Profit. I'll work through the numbers step-by-step and I'm confident I can get the right answer.
DE
Dean
1 year ago
I'm a bit confused on how to calculate the cost of goods sold here. Do we use the opening inventory, closing inventory, and purchases? Or is there another formula I'm missing?
PA
Paris
1 year ago
Hmm, this looks straightforward enough. I'll just need to plug the numbers into the gross profit formula: Revenue - Cost of Goods Sold. Should be a quick calculation.
NA
Nana
1 year ago
Okay, let's think this through step-by-step. We have the revenue, opening and closing inventories, and purchases. I think we need to calculate the cost of goods sold and then subtract that from the revenue to get the gross profit.
GL
Glendora
1 year ago
Ooh, an accounting question! My time to shine. *adjusts glasses* Alright, let's crunch those numbers and find the right answer. No pressure, right?
TI
Tiara
1 year ago
D) 6,700 profit
DA
Dacia
1 year ago
Let's calculate the gross profit.
OL
Olene
1 year ago
A) 17,600 profit
LE
Leah
1 year ago
Gross profit, huh? I'm gonna go with option E, 31,000 profit. Why? Because it's the biggest number, and who doesn't love a big profit? *winks*
TW
Twila
1 year ago
User3: I agree with User1, D) 6,700 profit seems right.
PA
Paz
1 year ago
No problem! It's always good to double-check, especially with numbers.
SA
Salena
1 year ago
User2: I'm going with A) 17,600 profit.
LO
Lorrine
1 year ago
User1: I think the answer is D) 6,700 profit.
SO
Soledad
1 year ago
Oh, really? I guess I got a bit carried away with the big numbers. Thanks for pointing that out!
GL
Glenn
1 year ago
I think you might have misread the options. The correct answer is actually D) 6,700 profit.
RO
Roy
1 year ago
Ah, I remember this type of question from my accounting classes. Time to put my skills to the test! *cracks knuckles* Let's do this.
VI
Virgie
2 years ago
Hmm, okay, I need to review my inventory and cost of goods sold formulas here. Gross profit is revenue minus cost of goods sold, and cost of goods sold is beginning inventory plus purchases minus ending inventory. I'll work this out step-by-step and double-check my answer.
KR
Kristal
2 years ago
This looks like a straightforward accounting question. Let me think this through - revenue of 24,300, opening inventory of 1,500, closing inventory of 8,000, and purchases of 13,200. I'm going to go with option A, 17,600 profit.
AM
Amber
1 year ago
Great, it's always good to double-check the numbers before making a final decision.
AL
Alysa
1 year ago
So, in this case, it would be 24,300 - (1,500 + 13,200 - 8,000) = 17,600.
JA
Jacquelyne
1 year ago
Yes, that's right. The formula for calculating gross profit is revenue minus cost of goods sold.
CH
Chanel
1 year ago
I agree with you, option A, 17,600 profit, seems to be the correct answer.
YO
Yolando
2 years ago
But Entity HJ had revenue of 24,300 and purchases of 13,200, so the gross profit should be higher than 6,700 loss.
JO
Jolene
2 years ago
I disagree, I believe it's B) 6,700 loss.
YO
Yolando
2 years ago
I think the answer is A) 17,600 profit.