Indrisano's Used Cars uses the specific identification method of costing inventory.During March, Indrisano purchased three cars for $12,000, $14,400, and $19,200, respectively.During March, two cars are sold for a total of $34,600.Indrisano determines that at March 31, the $14,400 car is still on hand.What is Indrisano's gross profit for March?

Question

Quizplus · Accepted Answer

Using the specific identification method, we can identify which cars were sold. Since the $14,400 car is still on hand, the cars sold must be the ones bought for $12,000 and $19,200. The total cost of these cars is $12,000 + $19,200 = $31,200. The sales revenue is $34,600. Therefore, the gross profit is $34,600 - $31,200 = $3,400.

Indrisano's Used Cars Uses the Specific Identification Method of Costing