Make Money Company Inc

question 102

Multiple Choice

Make Money Company Inc. had beginning inventory of $25,200, purchases of $87,600, ending inventory of $29,100, sales of $153,000, operating expenses of $30,000, and a tax rate of 40% for 2012. An accounting clerk input the ending inventory as $21,900. What is the effect on 2012 gross profit?

• A) Gross profit will be $7,200 higher.
• B) Gross profit will be $7,200 lower.
• C) Gross profit will be $14,400 higher.
• D) Gross profit will be $3,600 lower.

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