During the current year, merchandise is sold for $18,300 cash and $295,700 on account.

During the current year, merchandise is sold for $18,300 cash and $295,700 on account. 

The cost of the merchandise sold is $188,000. What is the amount of the gross profit?

Answer:

a. $126,000 ($18,300 + $295,700 – $188,000)

Merchandise is sold on account to a customer for $56,500, terms FOB shipping point, 2/10, n/30.

Merchandise is sold on account to a customer for $56,500, terms FOB shipping point, 2/10, n/30. The seller paid the freight of $2,100. Determine the following: (a) amount of the sale, (b) amount debited to Accounts Receivable, and (c) amount received within the discount period.

Answer:

a. $55,370 [$56,500 – ($56,500 × 2%)]

b. $57,470 ($55,370 + $2,100)

c. $57,470