Holidays Ltd manufactures caravans.Transactions for the year ended 30 June 2016 were as follows:
- What was the reported profit for the year ended 30 June 2016 if revenue was recognised at the point of sale?
A) $4 750 000
B) $5 000 000
C) $6 000 000
D) $2 000 000

Question

Holidays Ltd manufactures caravans.Transactions for the year ended 30 June 2016 were as follows: 
- What was the reported profit for the year ended 30 June 2016 if revenue was recognised at the point of sale?
A) $4 750 000 
B) $5 000 000 
C) $6 000 000 
D) $2 000 000

Quizplus · Accepted Answer

The reported profit would be the total revenue minus the cost of goods sold. Based on the information provided in the table, the total revenue for the year ended 30 June 2016 would be the sum of the sales revenue for caravans which is $5,000,000. Therefore, the reported profit would be equal to $5,000,000 - $0 = $5,000,000. Therefore, the correct answer is option B.

Holidays Ltd Manufactures Caravans