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Food Depot Ltd. assembled the following information at the end of the current reporting period: Sales revenue $56,400 Beginning inventory 21,250 Purchases 9,000 Purchase returns
Food Depot Ltd. assembled the following information at the end of the current reporting period:
Sales revenue | $56,400 |
Beginning inventory | 21,250 |
Purchases | 9,000 |
Purchase returns | 600 |
Freight-in | 950 |
Selling expense | 15,750 |
Mark-up on cost (estimated) | 25 percent |
If the gross margin method is used to estimate ending inventory, what amount should be reported as pre-tax income or loss?
Multiple Choice
$4,470 loss
$15,975 income
$26,870 income
$29,370 income
$5,345 loss
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