Memories Company commenced operations on July 1. Memories Company uses a periodic inventory system. During July, Memories Company was involved in the following transactions and events:
July 2 Purchased $15,000 of merchandise from Suppliers Inc. on account, terms 2/10, n/30, FOB shipping point.
3 Returned $1,200 of merchandise to Suppliers Inc. as it was damaged. Received a credit on account from Suppliers.
4 Paid $500 of freight costs on July 2 shipment.
8 Sold merchandise for $2,000 cash.
11 Paid Suppliers Inc. the full amount owing.
15 Sold merchandise for $6,000 on account, 1/10, n/30, FOB shipping point.
25 Received full payment for the merchandise sold on July 15.
31 Memories did a physical count and determined there was $10,500 of inventory on hand.
Instructions
(a) Record the transactions in Memories Company's books.
(b) What was Memories' gross profit for July?