Romanoff Industries Had the Following Inventory Transactions Occur During 2015

question 151

Multiple Choice

Romanoff Industries had the following inventory transactions occur during 2015: $$\begin{array} { l l c c } & & \text { Units } & \text { Cost/unit } \\2 / 1 / 15 & \text { Purchase } & 54 & \$ 45 \\3 / 14 / 15 & \text { Purchase } & 93 & \$ 47 \\5 / 1 / 15 & \text { Purchase } & 66 & \$ 49\end{array}$$ The company sold 150 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's after-tax income using FIFO? (rounded to whole dollars)

• A) $2,322
• B) $2,486
• C) $3,318
• D) $3,552

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Definitions:

Present Value

The current worth of future cash flows discounted at an appropriate discount rate, reflecting the time value of money.

Endowment

Funding provided to an institution or individual in the form of investment income, typically aimed at supporting specific activities or maintaining long-term financial stability, differentiated here as purpose-specific funds.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Consumes

To use up resources or goods, typically in the context of eating, drinking or utilizing products to satisfy needs or wants.