During the year Sarahs pet shops merchandise inventory decreased by $40,000. If the companies cost of goods sold for the year was $600,000 purchases would have been:

• a.) $640,000
• b.) $560,000
• c.) $520,000 unable to determine

What is a difference between merchandise company and service enterprises?

• a.) Merchandise companies must prepare multiple step income statement and service enterprises must prepare single step income statement
• b.) Merchandise companies generally have a longer operating cycle than service enterprise
• c.) Cost of goods sold is an expense for service enterprises but not for merchandising companiesd.) All are difference

Andre fashion sold merchandise for $95,000 cash during the month of July. Returns that month total $2,000. If the companys gross profit rate is 40% Andrea will report monthly net sales revenue and cost of goods sold of:

• a.) $95,000 and $57,000
• b.) $93,000 and $37,200
• c.) $93,000 and $55,800
• d.)$95,000and$55,800

A company shows the following balances:

Sale Revenue	$800,000
Sale Returns in Allowances	$75,000
Sale Discount	$25,000
Cost of Goods Sold	$420,000

What is the gross profit rate?

• a.) 53%
• b.) 60%
• c.) 40%
• d.) 47%