Dobler Company Uses a Periodic Inventory System An End of the Month (1/31/2017) Inventory Showed That 240

question 32

Multiple Choice

Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows: $\begin{array}{llrr}&\text { Units } &\text { Per unit price }&\text { Total }\\\text { Balance, } 1 / 1 / 2017 & 300 & \$ 5.00 & \$ 1.500 \\\text { Purchase, } 1 / 15 / 2017 & 150 & 5.30 & 795 \\\text { Purchase, } 1 / 28 / 2017 & 150 & 5.50 & 825\end{array}$ An end of the month (1/31/2017) inventory showed that 240 units were on hand. If the company uses FIFO and sells the units for $10 each, what is the gross profit for the month?

• A)$1,782
• B)$1,818
• C)$3,600
• D)$2,400

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Definitions:

Needed Cash

The amount of liquidity a company or individual requires to meet immediate obligations or for short-term goals.

Commercial Paper

Commercial Paper is an unsecured, short-term debt instrument issued by corporations, typically for the financing of operating expenses and meeting short-term liabilities.

Maturity

The date when a financial instrument (like a bond) expires and the principal is to be paid back to creditors.

Annual Interest Rate

The percentage increase in money lent or invested over a one-year period, expressed as a percentage of the principal.