Question

On November​ 1, 2017, Lotz Company sold merchandise for​ $16,000, FOB​ destination, with payment terms of​ 2/10, n/40. Customer returns on this sale amounted to​ $4,000. The company received payment for the balance on November​ 10, 2017. The cost of goods sold was​ $3,600. Calculate the amount of gross profit from these transactions.

Answer 1

Answer:

The amount of gross profit from these transactions = $8,160

Explanation:

Data provided from the question;

Amount of merchandise sold = $16,000

payment terms = 2/10, n/40

customer returns on the sale = $4,000

cost of goods sold = $3,600

To calculate the amount of gross profit from these transactions;

= Merchandise sold - customer returns on the sale

=$16,000 - $4,000

= $12,000

= $12,000  - discount 12,000 × 0.02

= $12,000 - $240

= $11760  - cost of goods sold

= $11,760 - $3600

= $8,160

Answer 2

Answer: gross profit = $8,160

Explanation:

GIVEN THE FOLLOWING ;

Merchandise sold = $16,000

Payment terms = 2/10, n/40

Return on sales = $4,000

Cost of goods sold = $3,600

To calculate Gross profit :

Adjusted sale =( Merchandise sold - return on sales)

Adjusted sale = $16,000 - $4,000 = $12,000

Discount on sale = $12,000 × 0.02 = $240

$12,000 - $240(discount amount) = $11,760

$11, 760 - $3600(cost of good sold) = $8,160 (gross profit)