Turner Corporation Acquired Two Inventory Items at a Lump-Sum Cost

question 90

Multiple Choice

Turner Corporation acquired two inventory items at a lump-sum cost of $50,000.The acquisition included 3,000 units of product LF, and 7,000 units of product 1B.LF normally sells for $15 per unit, and 1B for $5 per unit.If Turner sells 1,000 units of LF, what amount of gross profit should it recognize?

• A)$1,875
• B)$5,625.
• C)$10,000.
• D)$11,875.

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Definitions:

NSF Check

Stands for Non-Sufficient Funds Check, a check that cannot be processed due to insufficient funds in the account it was drawn on.

Adjusting Entry

Journal entries made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Bank Reconciliation

Bank reconciliation is the process of matching the balances in an entity's accounting records to the corresponding information on a bank statement, to ensure accuracy and identify discrepancies.

Journal Entry

A record used in bookkeeping that logs the debits and credits made to different accounts as a result of business transactions.