Question

Slotnick Chemical received $230,000 from customers as deposits on returnable containers during 2018. Ten percent of the containers were not returned. The deposits are based on the container cost marked up 10%. How much profit did Slotnick realize on the forfeited deposits?

Answer 1

$20,909.09

Step-by-step explanation:

We have been given that Slotnick Chemical received $230,000 from customers as deposits on returnable containers during 2018. 10% of the containers were not returned. The deposits are based on the container cost marked up 10%.

The price after mark-up would be
`100\%+10\%=110\%`

To find the profit on the forfeited deposits, we will divide $230,000 times 10% by 110% as:

`\text{Profit on the forfeited deposits}=(\$230,000* 10\%)/(110\%)`

`\text{Profit on the forfeited deposits}=(\$230,000)/(11)`

`\text{Profit on the forfeited deposits}=\$20,909.0909`

`\text{Profit on the forfeited deposits}\approx \$20,909.09`

Therefore, Slotnick realize a profit of $20,909.09 on the forfeited deposits.