Gross Profit During the current year merchandise is sold for

Gross Profit During the current year, merchandise is sold for $199,000 cash and $424,100 on account. The cost of merchandise sold is $411,200. What is the amount of the gross profit?

Solution

1.) Gross profit = sales - costs

   =($199,000 + $424,100) - $411,200

= $211,900.

2.) freight term returns :

   A = $9,200 - $1,150-($9,200-$1,150)*2% + $600 = $8,489

B = $4,600 - $1,000-($4,600-$1,000)* 1% + $200 = $3,440.

4.) Inventory shrinkage for Rodriguez company :

   cost of merchandise sold ($112,380- $100,020)..... Dr $12,360.

merchandise Inventory $12,360

3.) journalize the Wilimgtons company account on sale of accounts and collection :

a.) Account receivable ($5,300 - ($5,300*2%)) ..Dr...$5,194

   sales account $5,194

Cost of merchandise account ... dr    $3,180

   Merchandise Inventory account $3,180

b.) Cash account ..... dr    $5,194

Account receivable account    $5,194.

Journalize the purchase and payment :

a.) Merchandise inventory account ... dr $5,194

   Account receivable account    $5,194

b.) Account receivable account ... dr $3,180

   Cash account    $3,180