1. Gross Profit

During the current year, merchandise is sold for $196,400 cash and $489,300 on account. The cost of merchandise sold is $480,000. What is the amount of the gross profit?

2.

Freight Terms

Determine the amount to be paid in full settlement of each of two invoices (a) and (b), assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. If required, round the answers to the nearest dollar.

	Merchandise		Freight Paid by Seller		Freight Terms		Returns and Allowances
a.	$10,000		$100			FOB shipping point, 2/10, n/30	$1,550
b.	4,500		100			FOB destination, 1/10, n/30	800

a.	$
b.	$

Inventory Shrinkage

Corona Company's perpetual inventory records indicate that $238,040 of merchandise should be on hand on January 30, 2019. The physical inventory indicates that $214,240 of merchandise is actually on hand.

Journalize the adjusting entry for the inventory shrinkage for Corona Company for the year ended January 30, 2019. Assume that the inventory shrinkage is a normal amount.