On 1 November 2014, Everett Janitorial Supply sold inventory for $5 000, FOB destination, 2/10, n/30. The inventory cost $3 200. Everett paid transportation costs of $100. On 6 November 2014, inventory of $1 000 from the 1 November sale was returned. The returned inventory had cost $600. Everett received payment for the balance of the sale on 10 November 2014. If this were the only sales transaction of the period, what amount of Gross profit would be shown on the income statement? All figures EXCLUDE GST.

Question

Quizplus · Accepted Answer

Gross profit = Sales revenue - Cost of goods sold - Transportation costs= $5,000 - $3,200 - $100= $1,700Less: Returned goods= $1,700 - $600= $1,100Less: Discount= $1,100 - $100= $1,000Gross profit = $1,000

On 1 November 2014, Everett Janitorial Supply Sold Inventory for $5