Rhanda Merchandising Inc.
Income Statement
Total revenue $2,980,000
-Cost of goods sold ($1,520,828)
Gross profit $1,459,172
-Depreciation expense ($250,000)
Operating profit $1,209,172
Gain on condemnation of company property $266,000
-Loss of assets from meteor strike ($656,000)
Income from continuing operations before taxes $819,172
-Income taxes ($207,000)
Income from continuing operations after taxes $612,172
Gain from discontinued operations $755,000
-Loss from discontinued operations ($475,000)
Net income $892,172
I believe the answer is C, though I'm unsure.
The right choice is option (D). According to the given situation, the details are as follows: Purchase cost = $3,300 Transportation cost = $290 Return value = $230 Discount rate = 3% To find the total cost of merchandise, we follow this procedure: First, we deduct the return value from the purchase value. Then, $3,300 - $230 = $3,070 Now, we apply the discount, which is 3% of $3,070 = $92.10 Net purchase value = $3,070 - $92.10 = $2,977.90 Next, we add the transportation expense to the purchase value: $2,977.90 + $290 = $3,267.90 Thus, the complete cost of this merchandise is $3,267.90.
