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Tanner Company imports and sells a product produced in Canada. In the summer of Year 3, a natural disaster disrupted production, affecting its supply of product. Tanner Company uses the LIFO inventory method. On January 1, Year 3, Tanner Company's inventory records were as follows: Year purchased Year 1 Year 2 Total Quantity (units) Cost per unit $120 $165 2,000 5,000 7,000 Through mid December of Year 3, purchases were limited to 8,000 units, because the cost had increased to $240 per unit. Tanner sold 14,200 units during Year 3 at a price of $306 per unit which significantly depleted its inventory. Tanner Company uses a periodic inventory system. Select one: O A. $3,741,000 O B. $1,456,200 O C. $321,800 O D. $3,109,800 Total cost $240,000 825,000 $1,065,000 Assume that Tanner Company makes no further purchases during Year 3. Compute Tanner Company's gross profit for Year 3.

Tanner Company imports and sells a product produced in Canada. In the summer of Year 3, a natural disaster disrupted production, affecting its supply of product. Tanner Company uses the LIFO inventory method. On January 1, Year 3, Tanner Company's inventory records were as follows: Year purchased Year 1 Year 2 Total Quantity (units) Cost per unit $120 $165 2,000 5,000 7,000 Through mid December of Year 3, purchases were limited to 8,000 units, because the cost had increased to $240 per unit. Tanner sold 14,200 units during Year 3 at a price of $306 per unit which significantly depleted its inventory. Tanner Company uses a periodic inventory system. Select one: O A. $3,741,000 O B. $1,456,200 O C. $321,800 O D. $3,109,800 Total cost $240,000 825,000 $1,065,000 Assume that Tanner Company makes no further purchases during Year 3. Compute Tanner Company's gross profit for Year 3.

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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Tanner Company imports and sells a product produced in Canada. In the summer of Year 3, a natural disaster disrupted production, affecting its supply of product. Tanner Company uses the LIFO inventory method. On January 1, Year 3, Tanner Company's inventory records were as follows: Year purchased Quantity (units) Cost per unit Year 1 $120 Year 2 $165 Total Through mid December of Year 3, purchases were limited to 8,000 units, because the cost had increased to $240 per unit. Tanner sold 14,200 units during Year 3 at a price of $306 per unit, which significantly depleted its inventory. Tanner Company uses a periodic inventory system. Assume that Tanner Company makes no further purchases during Year 3. Compute Tanner Company's gross profit for Year 3. Select one: 2,000 5,000 7,000 O A. $3,741,000 B. $1,456,200 C. $321,800 D. $3,109,800 Total cost $240,000 825,000 $1,065,000
Transcribed Image Text:Tanner Company imports and sells a product produced in Canada. In the summer of Year 3, a natural disaster disrupted production, affecting its supply of product. Tanner Company uses the LIFO inventory method. On January 1, Year 3, Tanner Company's inventory records were as follows: Year purchased Quantity (units) Cost per unit Year 1 $120 Year 2 $165 Total Through mid December of Year 3, purchases were limited to 8,000 units, because the cost had increased to $240 per unit. Tanner sold 14,200 units during Year 3 at a price of $306 per unit, which significantly depleted its inventory. Tanner Company uses a periodic inventory system. Assume that Tanner Company makes no further purchases during Year 3. Compute Tanner Company's gross profit for Year 3. Select one: 2,000 5,000 7,000 O A. $3,741,000 B. $1,456,200 C. $321,800 D. $3,109,800 Total cost $240,000 825,000 $1,065,000
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