Dawson's Fashions sold merchandise for $40,000 cash during the month of July. Returns that month totaled $1,000. If the company's gross profit rate is 40%, Dawson's will report monthly net sales revenue and cost of goods sold of

Question

Quizplus · Accepted Answer

Net sales revenue is calculated as total sales minus returns, which is $40,000 - $1,000 = $39,000. The cost of goods sold is calculated as net sales revenue minus gross profit. With a gross profit rate of 40%, the gross profit is 40% of $39,000, which is $15,600. Therefore, the cost of goods sold is $39,000 - $15,600 = $23,400.

Dawson's Fashions Sold Merchandise for $40,000 Cash During the Month