Question

PART B: COMPREHENSIVE QUESTIONS: SHOW WURK PORTA 7. Durable Equipment Company uses the periodie inventory system. Durable reported the following selected amounts at June 30, 2019 (the beginning inventory balance is also provided (25 Points) AED Merchandise Inventory, July 1, 2018 Merchandise Inventory, June 30, 2019 Purchases Purchase Discounts Purchase Returns and Allowances Freight In Net Sales Revenue Delivery Expense Sales Salaries Expense Common Stock Retained Earnings 22,000 19,000 96.000 5,000 8,500 3,200 212.400 1.400 44,200 45,000 24,500 Compute the following: (20 Pts) Beginning Merchandise Inventory Purchases Less: Purchase Returns and Allowances Purchase Discounts Net Purchases Plus: Freight in Net Cost of Purchases Cost of Goods Available for Sale Less: Ending Inventory Cost of Goods Sold (5 Pts) Net Sales Revenue (2 pts) Less: Cost of Goods Sold (1 pt) Gross Profit Gross Profit Margin to one decimal AED AED AED

Answer 1

Beginning Merchandise Inventory		AED 22,000
Purchases	AED 96,000
Less: Purchase Returns and Allowances	AED 8,500
Purchase Discounts	AED 5,000
Net Purchases                                    [AED 96,000 - AED 8,500 - AED 5,000]	AED 82,500
Plus: Freight in	AED 3,200
Net Cost of Purchases                      [AED 82,500 + AED 3,200]		AED 85,700
Cost of Goods Available for Sale     [AED 22,000 + AED 85,700]		AED 107,700
Less: Ending Inventory		AED 19,000
Cost of Goods Sold.                           [AED 107,700 - AED 19,000]		AED 88,700

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Net Sales Revenue	AED 212,400
Less: Cost of Goods Sold [Refer above]	AED 88,700
Gross Profit	AED 123,700
Gross Profit Margin [(Gross Profit / Net Sales revenue) x 100 = (AED 123,700 / AED 212,400) x 100]	58.2%