Saunders Hardware Sells on the Instalment Plan

question 9

Multiple Choice

Saunders Hardware sells on the instalment plan.Sales-related figures for Saunders Hardware for 2017 were as follows: sales,$600 000;down payments on the sales,$60 000;collections on instalments,$250 000;beginning inventory,$90 000;ending inventory $60 000;and purchases,$400 000.What is Saunders Hardware's gross profit using the sales method of income recognition?

• A)$200 000
• B)$170 000
• C)$260 000
• D)$190 000

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Definitions:

Minority Psychologists

Psychologists who belong to a racial, ethnic, or cultural minority group, and who may focus on issues relevant to the psychology of minority populations.

Field of Psychology

The scientific study of the mind and behavior, including processes related to thoughts, emotions, and actions.

Total Manufacturing Costs

The aggregate of direct materials, direct labor, and manufacturing overhead incurred in the production of goods.

Work-In-Process

Items that are in the stage of production but are not yet complete, representing a cost that includes materials, labor, and overhead.