Watsontown Yacht Sales has been selling large power cruisers for 25 years. On January 1, 20X1, the company had $5,950,000 in inventory (based on a FIFO valuation). While the number of yachts in Watsontown Yacht Sales’s inventory remained fairly constant throughout 20X1, by December 31, 20X1, yacht prices were 7% higher than at the start of the year. The company reported cost of goods sold for 20X1 of $23,800,000. Required: Calculate the amount of realized holding gains in Watsontown Yacht Sales’s income for 20X1.
Watsontown Yacht Sales has been selling large power cruisers for 25 years. On January 1, 20X1, the company had $5,950,000 in inventory (based on a FIFO valuation). While the number of yachts in Watsontown Yacht Sales’s inventory remained fairly constant throughout 20X1, by December 31, 20X1, yacht prices were 7% higher than at the start of the year. The company reported cost of goods sold for 20X1 of $23,800,000. Required: Calculate the amount of realized holding gains in Watsontown Yacht Sales’s income for 20X1.
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 14P
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Watsontown Yacht Sales has been selling large power cruisers for 25 years. On January 1, 20X1, the company had $5,950,000 in inventory (based on a FIFO valuation). While the number of yachts in Watsontown Yacht Sales’s inventory remained fairly constant throughout 20X1, by December 31, 20X1, yacht prices were 7% higher than at the start of the year. The company reported cost of goods sold for 20X1 of $23,800,000.
Required:
Calculate the amount of realized holding gains in Watsontown Yacht Sales’s income for 20X1.
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