A-LevelAccountingPreparation of financial statements9706/12 · Feb/Mar 2022 · Q241 Mark

A retailer made the following purchases of inventory in October. 5 Oct: 50 units at $500, total cost $25000; 12 Oct: 50 units at $500, total cost $25000; 23 Oct: 150 units at $525, total cost $78750. Total cost $128750. There was no opening inventory for October. The business uses the first-in first-out (FIFO) method to value its inventory. In October, 200 units were sold for $900 each. What was the gross profit for October?

A$76667

B$77000

C$77 500

D$96 250

✓ Correct answer

C: $77 500

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Feb/Mar 2022 Paper 1 Variant 2, question 24.

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