Question 1 during the current year merchandise is sold for, Ask an Expert

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Question: 1. During the current year, merchandise is sold for $200,000 cash and for $950,000 on account. The cost of the merchandise sold is $805,000.

a. What is the amount of the gross profit?

b. Compute the gross profit as a percent of sales.

c. Will the income statement necessarily report a net income? Explain.

2. For the fiscal year, sales were $3,570,000, sales discounts were $320,000, sales returns and allowances were $240,000, and the cost of merchandise sold was $2,142,000. What was the amount of net sales and gross profit?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92336289

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