Holliday Company's Inventory Records Show the Following Data A Physical Inventory on December 31 Shows 2,000 Units on Units

question 16

Multiple Choice

Holliday Company's inventory records show the following data:
$\begin{array}{llr}&\text { Units }&\text { Cost/unit }\\\text { Inventory, }\text { January 1 } & 5,000 & 4.50 \\\text { Purchases: }\text { June } 18 & 4,500 & 4.00 \\\text { November } 8 & 3,000 & 3.50\end{array}$
A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for
$£ 6$ each. The company has an effective tax rate of $20 \%$ . Holliday uses the periodic inventory
method. If the company uses FIFO, what is the gross profit for the period?

• A) \(£ 1,000\)
• B) \(£ 5,000\)
• C) \(£ 10,500\)
• D) \(£ 19,000\)