During its first month of operations, Purrfect Pets purchased 6,900 bags of dog

Question

During its first month of operations, Purrfect Pets purchased 6,900 bags of dog food at a cost of $7 a bag and sold all 6,900 bags of dog food on account with payment terms of $2/10, net 30 for $11 each. A total of 2,800 of these bags were sold to customers who paid within the discount period; the other customers paid after the discount period had ended. Sales allowances totaling $220 were granted to customers whose dogs did not like the dog food. Required: a. Calculate the gross profit for the month. Gross Profit b. Calculate the gross profit percentage for the month. (Round your answer to one decimal place (i.e., 0.1234 should be entered as 12.3)) Gross Profit Percentage 5%

Explanation / Answer

a) Calculate gross profit :

b) Gross profit percentage = 26764*100/75064 = 35.7%

Gross sales (6900*11) 75900 Less: Sales discount (2800*11*2%) (616) Less: Sales allowance (220) Net Sales 75064 Less: Cost of goods sold (6900*7) (48300) Gross profit 26764

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.