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Holidays Ltd manufactures caravans. Transactions for the year ended 30 June 2019 were as follows: i. 600 caravans was manufactured at a cost of $15,000 each. ii. 500 caravans were sold for $20,000 each. iii. Cash was collected on 475 of the caravans sold. What was the reported profit for the year ended 30 June 2019 if revenue was recognized when cash was received? a. $0 b. $5,000,000 c. $3,000,000 d. $2,500,000 e. $2,375,000

Holidays Ltd manufactures caravans. Transactions for the year ended 30 June 2019 were as follows: i. 600 caravans was manufactured at a cost of $15,000 each. ii. 500 caravans were sold for $20,000 each. iii. Cash was collected on 475 of the caravans sold. What was the reported profit for the year ended 30 June 2019 if revenue was recognized when cash was received? a. $0 b. $5,000,000 c. $3,000,000 d. $2,500,000 e. $2,375,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Holidays Ltd manufactures caravans. Transactions for the year ended 30 June 2019 were as follows: i. 600 caravans was manufactured at a cost of $15,000 each. ii. 500 caravans were sold for $20,000 each. iii. Cash was collected on 475 of the caravans sold. What was the reported profit for the year ended 30 June 2019 if revenue was recognized when cash was received? a. $0 b. $5,000,000 c. $3,000,000 d. $2,500,000 e. $2,375,000
Transcribed Image Text:Holidays Ltd manufactures caravans. Transactions for the year ended 30 June 2019 were as follows: i. 600 caravans was manufactured at a cost of $15,000 each. ii. 500 caravans were sold for $20,000 each. iii. Cash was collected on 475 of the caravans sold. What was the reported profit for the year ended 30 June 2019 if revenue was recognized when cash was received? a. $0 b. $5,000,000 c. $3,000,000 d. $2,500,000 e. $2,375,000
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