Hogan Industries Had the Following Inventory Transactions Occur During 2014

question 21

Multiple Choice

Hogan Industries had the following inventory transactions occur during 2014: The company sold 102 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used and operating expenses of $600, what is the company's after-tax income using FIFO? (rounded to whole dollars)

• A) $944
• B) $1,096
• C) $767
• D) $661

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Definitions:

Selling Price

The amount of money for which an item is sold to a buyer.

Hedge Transaction

A financial agreement or trade designed to reduce or eliminate the risk of future price fluctuations.

Forward Rate

A future exchange rate negotiated today, locking in the price at which a currency transaction will occur at a specified future date.

Forward Contract

A contractual agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.