Question
1. Goldway Inc sold merchandise to GMO Inc on account for $73,000 with credit terms of ?/15, n/45. The cost of the merchandise sold was
1. Goldway Inc sold merchandise to GMO Inc on account for $73,000 with credit terms of ?/15, n/45. The cost of the merchandise sold was $43,800. During the discount period, GMO Inc returned $3,000 of merchandise and paid its account in full (minus the discount) by remitting $69,300 in cash. Both Inc. use a perpetual inventory system. Which of the following is/are correct?
a. The net sales of the transactions to GMO Inc $69,300.
b. The amount of sales discounts is $700.
c. The missing discount percentage is 2%.
d. The goods returned from the GMO Inc will not change the cost of goods sold.
2. On January 1, 2020, Scott Enterprises inventory of 50,000. At December 31, 2020, Scott had the following account balances.
Freight-in | 4,750 |
Purchases | 509,000 |
Purchase discounts | 6,000 |
Purchase returns and allowances | 8,000 |
Sales revenue | 840,000 |
Sales discounts | 7,000 |
Sales returns and allowances | 11,000 |
At December 31, 2020, Scott determines that its ending inventory is 65,000.
Which of the following is/are correct?
a. The amount of Net Sales is 822,000.
b. Cost of goods sold is 484,750.
c. Gross Profit is 355,250.
d. Total cost of goods available for sale is 495,000.
e. Net Income is 330,250 if the operating expense during 2020 is 25,000.
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