Question

PE 6-1A Gross profit During the current year, merchandise is sold for $315,800 cash and $1,225,000 on account. The cost of the merchandise sold is $875,000. What is the amount of the gross profit? OBJ. 1 PE 6-1B Gross profit 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? OBJ. 1 Purchases transactions PE 6-2A 290 Halibut Company purchased merchandise on account from a supplier for $18,600, terms 2/10, n/30. Halibut Company returned $5,000 of the merchandise and received full credit. a. If Halibut Company pays the invoice within the discount period, what is the amount of cash required for the payment? b. What account is credited by Halibut Company to record the return? овл. 2 Purchases transactions PE 6-2B Hoffman Company purchased merchandise on account from a supplier for $65,000, terms 1/10, n/30. Hoffman Company returned $7,500 of the merchandise and received full credit. a. If Hoffman Company pays the invoice within the discount period, what is the amount of cash required for the payment? оBI. 2 b. What account is debited by Hoffman Company to record the return? OBJ. 2 Sales transactions PE 6-3A Journalize the following merchandise transactions: a. Sold merchandise on account, $72,500 with terms 2/10, n/30. The cost of the merchandise sold was $43,500. b. Received payment less the discount. C. Issued a credit memo for returned merchandise that was sold for $2,300 terms n/30. The cost of the merchandise returned was $1,600.

Answer 1

PE 6-1A

Gross Profit = Total Sales – Cost of Goods Sold

Total Sales = Cash Sales $315,800 + On Account Sales $1,225,000

= $1,540,800

Cost of Goods Sold = $875,000

Gross Profit = Total Sales $1,540,800 – Cost of Goods Sold $875,000

= $665,800

PE 6-1B

Gross Profit = Total Sales (18,300 + 295,700) – Cost of Goods Sold $188,000

= $126,000

PE 6-2A

a)

Amount payable to supplier after returning of merchandising = $18,600 - $5,000 = $13,600

Rate of Discount if paid within discount period = 2% discount if paid within 10 days

Discount amount = $13,600*2% = $272

The amount of cash required for the payment is $272

b)

The credit of account to record purchase return depends on the policy of company.

If company wants to analysis further the purchase return, the Purchase Return Account is credited otherwise Inventory Account is credited to record a purchase return transaction.

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