Ignoring Taxes, What Is the Total Amount of Unrealized Profits

question 27

Multiple Choice

Ignoring taxes, what is the total amount of unrealized profits in inventory at the end of 2019?

• A) $2,500.
• B) $3,000.
• C) $5,000.
• D)$20,000.

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Definitions:

Inventory Decrease

A reduction in the quantity or value of inventory held by a business over a specific period.

Cash Payments

Transactions involving the transfer of cash from one entity to another, usually as exchanges for goods, services, or to settle debts.

Purchases

Transactions involving the buying of goods or services for the purpose of resale or direct use in production or operations.

Free Cash Flow

The amount of cash generated by a business after accounting for capital expenditures such as buildings or equipment, indicating the company's ability to generate additional revenues.