A company purchased $1,800 of merchandise on December 5. On December 7, it returned $200 worth of merchandise. On December 8, it paid the balance in full, taking a 2% discount. The amount of the cash paid on December 8 equals: a. $1,564 b. $1,568 c. $1,600 d. $1,800 22. Which of the following expressions is INCORRECT? a. Gross profit-Operating expenses Net income b. Sales revenue -cost of goods sold -Operating expenses Net income 23. C. Net income + Operating expenses Gross profit d. Operating expenses- Cost of goods sold Gross profit 24. A company had net sales of $205,000 and gross profit of $134,200. If ending inventory was $8,000 and average inventory was $7,080, what is the company's inventory turnover? a. 10.0 b. 16.77 c. 18.95 d. 28.95 25. Which of the following is a reason that the Gross Profit rate might increase? a. Selling more units at a lower price, while the cost to produce increases. b. Paying higher prices to suppliers and not passing those increases to the customers. C. Lowering the sales price because of increased competition. d. Increasing the sales price while keeping the cost of goods sold constant The gross profit ratio: a. Is also called the net profit ratio b. Measures a merchandising firm's ability to earn a profit from the sale of inventory c. Is also called the profit margin d. Is a measure of liquidity 26. 27. Toys "R" Us had cost of goods sold of $9.421 million, ending inventory of $2,089 million and average inventoryof $1,965 million. Its days' sales in inventory equals: a. 451 b. 4.79 C. 75.9 days d. 80.7 days