Brookside Equipment Company uses the periodic inventory system

Question

Brookside reported the following selected amounts at June 30, 2017:

Merchandise Inventory, July 1, 2016 $22,000
Merchandise Inventory, June 30, 2017 19,000
Purchases 96,000
Purchase Discounts 5,000
Purchase Returns and Allowances 8,500
Freight In 3,200
Sales Revenue 234,000
Sales Discounts 7,400
Sales Returns and Allowances 14,200
Common Stock 45,000
Retained Earnings 24.50

Requirement A: Compute net sales revenue.
Requirement B: Compute cost of goods sold.
Requirement C: Compute gross profit.

What will be an ideal response

Answer 1

Requirement A

Sales Revenue $ 234,000
Less: Sales Discounts 7,400
Sales Returns & Allowances 14,200
Net Sales Revenue $ 212,400

Requirement B

Beginning Merchandise Inventory $ 22,000
Purchases $ 96,000
Less: Purchase Returns and Allowances 8,500
Purchase Discounts 5,000
Net Purchases 82,500
Plus: Freight In 3,200
Net Cost of Purchases 85,700
Cost of Goods Available for Sale 107,700
Less: Ending Inventory 19,000
Cost of Goods Sold $ 88,700

Requirement C

Net Sales Revenue $ 212,400
Less: Cost of Goods Sold 88,700
Gross Profit $ 123,700