10. periodic inventory calculations consider these account balances of davies co. for 2022. inventory (jan…

10. periodic inventory calculations consider these account balances of davies co. for 2022. inventory (jan 1) $206,000 sales 560,000 sales returns and allowances 13,000 purchases 412,000 purchase discounts 2,000 sales discounts 6,000 freight in 7,000 purchase returns and allowances 32,000 inventory (december 31, per count) 300,000 a. what is net sales? b. what is the cost of goods available for sale? c. what is the cost of goods sold? d. what is the gross profit?

10. periodic inventory calculations consider these account balances of davies co. for 2022. inventory (jan 1) $206,000 sales 560,000 sales returns and allowances 13,000 purchases 412,000 purchase discounts 2,000 sales discounts 6,000 freight in 7,000 purchase returns and allowances 32,000 inventory (december 31, per count) 300,000 a. what is net sales? b. what is the cost of goods available for sale? c. what is the cost of goods sold? d. what is the gross profit?

Answer

Explanation:

Step1: Calculate net sales

Net Sales = Sales - Sales Returns and Allowances - Sales Discounts Net Sales = $560,000 - 13,000 - 6,000=$541,000$

Step2: Calculate cost of goods available for sale

Net Purchases = Purchases - Purchase Discounts - Purchase Returns and Allowances+Freight - In Net Purchases = $412,000 - 2,000 - 7,000+32,000=$435,000$ Cost of Goods Available for Sale = Inventory (Jan 1)+Net Purchases Cost of Goods Available for Sale = $206,000 + 435,000=$641,000$

Step3: Calculate cost of goods sold

Cost of Goods Sold = Cost of Goods Available for Sale - Inventory (Dec 31) Cost of Goods Sold = $641,000 - 300,000=$341,000$

Step4: Calculate gross profit

Gross Profit = Net Sales - Cost of Goods Sold Gross Profit = $541,000 - 341,000=$200,000$

Answer:

a. Net Sales: $$541,000$ b. Cost of Goods Available for Sale: $$641,000$ c. Cost of Goods Sold: $$341,000$ d. Gross Profit: $$200,000$