Question

The following transactions are for Sheridan Company. On December 3, Sheridan Company sold $543,400 of merchandise. What is the total amount of merchandise sold by Sheridan Company on December 3?

1) $543,400
2) $543,400
3) $543,400
4) $543,400

Answer 1

Sheridan Company sold merchandise worth $543,400 on December 3. The accounting profit for the mentioned firm, after expenses, is $50,000.

Step-by-step explanation:

Regarding the question about the total amount of merchandise sold by Sheridan Company on December 3, the answer is straightforward. The company sold merchandise worth $543,400. This figure represents the total sales revenue from the merchandise and is the amount you would record as sales for that day.

To answer the self-check questions about the firm's accounting profit: we calculate accounting profit by subtracting total expenses from total sales revenue. Last year, the firm's sales revenue was $1 million. The total expenses, which include $600,000 on labor, $150,000 on capital, and $200,000 on materials, add up to $950,000. Subtracting this from the sales revenue leaves us with an accounting profit of $50,000.