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Ballard Company uses the perpetual inventory system. The company purchased $10,000 of merchandise from Andes Company under the terms 2/10, net/30. Ballard paid for the merchandise within 10 days and also
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34 votes
34 votes
Ballard Company uses the perpetual inventory system. The company purchased $10,000 of merchandise from Andes Company under the terms 2/10, net/30. Ballard paid for the merchandise within 10 days and also paid $450 freight to obtain the goods under terms FOB shipping point. All of the merchandise purchased was sold for $19,000 cash. What is the amount of gross margin that resulted from these business events

User Technupe
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1 Answer

26 votes
26 votes

Answer: $8750

Step-by-step explanation:

The amount of gross margin that resulted from these business events will be calculated as:

Purchase = $10000

Less: Purchase discount = $10000 × 2% = $200

Add: Freight paid = $450

Total purchase = $10250

Gross margin = Sales - Total Purchases

= $19000 - $10250

= $8750

User Maya Shah
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2.7k points
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