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A company's financial statements show a gross profit of $15 million. A major error in the inventory value system has been discovered resulting in an overstatement on opening inventory of $1.2 million and an understatement in closing inventory of $1.5 million.
What is the correct gross profit figure for the period?
Suggested Answer: B
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36 comments · newest first
GR
Gregoria
11 months ago
I think it’s definitely $14.7 million, good catch!
DE
Destiny
11 months ago
So, $15 million minus $1.2 million plus $1.5 million equals $14.7 million, right?
RO
Robt
12 months ago
Wait, are we sure about those inventory adjustments? Seems off.
GE
Geraldo
12 months ago
Totally agree, the math checks out!
OL
Olga
1 year ago
The gross profit should be adjusted to $14.7 million.
JA
Janna
1 year ago
I’m really uncertain about this one. I thought inventory errors only affected the balance sheet, not the gross profit directly.
IS
Isreal
1 year ago
This reminds me of a practice question where we adjusted gross profit for inventory errors. I think the correct answer might be $15.3 million.
YE
Yen
1 year ago
I think we need to subtract the overstatement and add the understatement to the gross profit, but I can't recall the exact numbers.
QU
Queenie
1 year ago
I remember something about how inventory adjustments affect gross profit, but I'm not sure how to calculate the net effect here.
HA
Haydee
1 year ago
Hmm, I'm a little unsure about this one. I know objective forecasting needs to be based on more than just opinions, but I'm not sure if it's just facts or if some judgement is also involved.
CH
Cherrie
1 year ago
This seems like a tricky question. I'll need to think carefully about the reasons businesses might be wary of sending checks to vendors with only street addresses.
HO
Hortencia
1 year ago
I'm pretty confident that the answer is Service Continuity Management. That's the ITIL process that's responsible for ensuring the organization can continue to provide essential services during a disaster or major incident.
LA
Laurel
1 year ago
I heard the company's inventory was so messed up, they had to hire a professional 'lost and found' expert to find all the missing items. Guess they should have invested in a better inventory system, huh?
EL
Eladia
1 year ago
C) $14.7 million
ME
Merilyn
1 year ago
B) $15.3 million
RE
Rebecka
1 year ago
A) $17.7 million
IR
Iraida
1 year ago
Ah, the joys of financial accounting. I'm going with D) $12.3 million - let's hope I'm not cooking the books like the company in the question!
EL
Elena
1 year ago
Inventory - the bane of every accountant's existence! I'm feeling confident about A) $17.7 million, but I'll run the numbers one more time just to be safe.
JA
Janna
1 year ago
I'm not sure, but I think it might be C) $14.7 million. Can you explain your reasoning for A)?
GR
Graciela
1 year ago
I'm pretty sure it's A) $17.7 million. Let's go over the calculations together.
TA
Tamar
1 year ago
I'm leaning towards B) $15.3 million. Are you sure about A)?
WI
Willard
1 year ago
I think it's A) $17.7 million too. Let's double check.
VO
Von
1 year ago
Hmm, gotta love those inventory discrepancies. I'm leaning towards C) $14.7 million, but I'll double-check my work just to be sure.
CH
Charlene
1 year ago
User 3: Let's double-check our calculations just to be safe.
CO
Coral
1 year ago
User 2: I agree, it seems like the most logical choice.
PR
Providencia
1 year ago
User 1: I think the correct gross profit figure is $14.7 million.
JO
Jodi
1 year ago
Wow, talk about a major inventory issue! I'm going with B) $15.3 million - that seems to be the correct answer after accounting for the overstatement and understatement.
GA
Gabriele
1 year ago
I agree with the original comment, B) $15.3 million seems to be the correct answer.
CA
Carole
1 year ago
No, I believe it's C) $14.7 million.
PA
Patti
1 year ago
I think the correct gross profit figure is A) $17.7 million.
HA
Hana
2 years ago
But the error in the inventory value system would affect the gross profit, so it should be $14.7 million.
TA
Tasia
2 years ago
I disagree, I believe it is $15.3 million.
HA
Hana
2 years ago
I think the correct gross profit figure is $17.7 million.
CA
Callie
2 years ago
I agree with Reuben, the correct gross profit figure should be $17.7 million after adjusting for the inventory errors.
RE
Reuben
2 years ago
I disagree, I believe it should be $17.7 million because we need to adjust for the inventory errors.
SH
Shantell
2 years ago
I think the correct gross profit figure is $15.3 million.