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Could you please show all working out for this question? I don't understand how you can get the correct answer for net profit when COGS
Could you please show all working out for this question? I don't understand how you can get the correct answer for net profit when COGS can change in 2018 compared to 2022, since the cost of inventory changes due to inflation and supplier selling prices, and the question does not tell you what COGS is, so it's difficult to calculate the taxes that need to be paid on the gross profit to arrive at the net profit figure.
Cecily Cedric is a toy manufacturer producing toys that are shipped to various retail customers upon receipt of their purchase orders. Sales are billed after shipment. The company estimates that approximately 2 per cent of credit sales prove to be uncollectable. Cecily Cedric found an error in its revenue account: an invoice for $6,600 was recorded as revenue in 2018 when it should have been recorded in 2022. The company's income tax rate is 30%, and there was no corresponding error in cost of goods sold. What is the effect of the error on the 2022 net profit? a. It is $4,620 too low. b. It is $6,600 too high. c. It is $1,980 too high. d. None of the other options. e. It is $600 too high. The correct answer is: It is $4,620 too lowStep by Step Solution
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