Super Drive, a computer disk storage and back-up company, uses accrual accounting. The company’s Statement of Financial Position for the year ended November 30 is as follows: Super Drive’s projected gross profit for the month ending December 31 is A. $416,000 B. $104,000 C. $134,000 D. $536,000
Answer (B) is correct . Given that cost of goods sold is 80% of sales, gross profit is 20% of sales. Consequently, pro forma gross profit is $104,000 ($520,000 ¡Á 20%). Answer (A) is incorrect because Cost of goods sold is $416,000 (80% of sales). Answer (C) is incorrect because The amount of $134,000 equals 20% of the sum of November receivables and December sales. Answer (D) is incorrect because Gross profit cannot be greater than sales.