Question

Sullivan Company uses the periodic inventory system. The following balances were drawn from the accounts of Sullivan Company prior to the closing process: Sales revenue $ 21,500 Beginning inventory balance 5,100 Purchases 9,900 Transportation-in 1,350 Transportation-out 1,550 Purchase discounts 1,150 Ending inventory balance 5,500 What is the gross margin that will be shown on the income statement bartley

Answer 1

Answer:

$11,800

Explanation:

Calculation to determine the gross margin that will be shown on the income statement bartley

First step is to calculate the Cost of goods sold

Cost of goods sold = 5,100 + 9,900 + 1,350 - 1,150 - 5,500

Cost of goods sold = $9,700

Now let determine the Gross margin

Using this formula

Gross margin=Sales-COGS

Let plug in the formula

Gross margin = $21,500 - $9,700

Gross margin = $11,800

Therefore the gross margin that will be shown on the income statement bartley is $11,800