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On May 1, Sue Flay's Dessert Shop has 1,200 pre-packaged cakes in its inventory, which cost $25 per cake to manufacture. It manufactures no other cakes during May. It reports only the following transactions for the month:

  • May 2: sells 400 cakes to Marsha Mellow at $92 per cake, with terms 2/10, net 30
  • May 5: sells 550 cakes to C. Señor Foods at $90 per cake, with terms 3/10, net 20
  • May 7: Marsha Mellow returns 20 cakes, which Sue Flay's Dessert Shop accepts
  • May 11: Marsha Mellow pays the correct balance she owes
  • May 16: C. Señor Foods is granted an allowance for 15 cakes which have spoiled
  • May 26: C. Señor Foods pays the correct balance it owes

Questions: Assuming the journal entries for each of these transactions were properly recorded:

1. What amount of gross profit should Sue Flay's Cake Shop report for the month ending May 31?

2. How much cash did Sue Flay's Cake Shop receive, in total, from its customers?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M92440611
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