High Quality Jewelers uses the perpetual inventory system.On March 3,High Quality sold merchandise for $50,000 to a customer on account with terms 4/15,n/30.The cost of goods sold was $20,000.On March 18,High Quality received payment from the customer.Calculate the amount of gross profit.

Question

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- The terms 4/15, n/30 means that the customer can get a 4% discount if they pay within 15 days, otherwise the full amount is due in 30 days.
- Since the customer paid on March 18, which is within the discount period, they will receive a discount of 4% on the $50,000, which is $2,000.
- The amount of gross profit is the difference between the selling price and the cost of goods sold, so it is $50,000 - $20,000 = $30,000.
- However, since the customer received a discount, the amount of gross profit needs to be adjusted by subtracting the discount amount from the selling price, so it is $50,000 - $2,000 - $20,000 = $28,000. Therefore, the best choice is C) $28,000.

High Quality Jewelers Uses the Perpetual Inventory System