L5: Merchadising operation

Which of the following statements is true?

• Gross margin = Net sales – Cost of goods sold

• Net sales + Cost of goods sold = Gross margin

• Gross margin – Cost of goods sold = Net sales

• Net sales + Gross margin = Cost of goods sold

What is included in the journal entry to record the sale of $300 with terms of 2/10 n/30:

• A. debit to Sales for $294.

• B. debit to Cash $300. 

• C. debit to Accounts Receivable of $300.

• D. debit to Sales Discounts for $6.

Which of the following is false?

• Beginning inventory + Net purchases – Freight in = Cost of goods available for sale

• Net purchases = Purchases – Purchase discounts – Purchase returns and allowances

• Cost of goods available for sale – Ending inventory = Cost of goods sold

• Beginning inventory = Cost of goods sold + Ending inventory – Net purchases – Freight in

XYZ Store purchased merchandise for $2,300, terms 2/10 n/30. To get the merchandise ready for sale, XYZ also paid $100 for freight-in and $50 for insurance during transportation. The entry to record the cost of inventory will include a:

• A.  debit to Inventory $2,450.

• B.  debit to Cash $2,450.

• C.  credit to Accounts Payable $2,401.

• D.  debit to Inventory $2,300

Lighting Depot had a $48,000 beginning inventory and a $52,000 ending inventory. Sales were $320,000, purchases of merchandise were $172,000, merchandise returned to suppliers was $10,000, purchase discounts taken were $8,000, and transportation costs for merchandise purchased were $12,000. Cost of goods sold for the period was

• $98,000

• $138,000

• $162,000

• $170,000