Assume the perpetual inventory method is used.1) The company purchased $12,500 of merchandise on account under terms 2/10, n/30.
2) The company returned $1,200 of merchandise to the supplier before payment was made.
3) The liability was paid within the discount period.
4) All of the merchandise purchased was sold for $18,800 cash.
The amount of gross margin from the four transactions is:
A. $6,550.
B. $7,726.
C. $11,074.
D. $5,100.
Answer: B
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Which of the following statements is CORRECT, assuming positive interest rates and holding other things constant?
A. Banks A and B offer the same nominal annual rate of interest, but A pays interest quarterly and B pays semiannually. Deposits in Bank B will provide the higher future value if you leave your funds on deposit. B. The present value of a 5-year, $250 annuity due will be lower than the PV of a similar ordinary annuity. C. A 30-year, $150,000 amortized mortgage will have larger monthly payments than an otherwise similar 20-year mortgage. D. A bank loan's nominal interest rate will always be equal to or less than its effective annual rate. E. If an investment pays 10% interest, compounded annually, its effective annual rate will be less than 10%.
Many services are performed by humans. As a result, they can vary from purchase occasion to occasion. This characteristic of services is referred to as:
A) inseparability. B) intangibility. C) nonstandardization. D) difficulty of inventorying.
The entry to record a $1,500 sale with terms of 2/10, n/30 would include a(n)
A) decrease to Accounts Receivable for $1,500. B) increase to Sales for $1,500. C) increase to Sales Discounts for $30. D) decrease to Sales for $1,470.
The decisions about each of the following can be changed fairly easily except decisions related to ______.
A. transportation B. where to locate facilities C. inventory D. information sharing