Right Company purchased merchandise for $4,000 and sold it for $6,000. Between the time the inventory was purchased and sold, it appreciated in value by $500. What is the gross profit to be reflected on the income statement when the inventory is sold? $6,000 B $2,500 $2,000 $1,500

Right Company purchased merchandise for $4,000 and sold it for $6,000. Between the time the inventory was purchased and sold, it appreciated in value by $500. What is the gross profit to be reflected on the income statement when the inventory is sold? $6,000 B $2,500 $2,000 $1,500

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 46E

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Question

Right Company purchased merchandise for $4,000 and sold it for $6,000. Between the time the inventory was purchased and
sold, it appreciated in value by $500. What is the gross profit to be reflected on the income statement when the inventory is sold?
A $6,000
B $2,500
$2,000
$1,500

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Step 2: Calculation of the gross profit to be reflected on the Income Statement, as follows:

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