Question

Charlet Company sells office chairs to its customers. On June 10, Charlet purchased 40 office chairs from one of its suppliers, paying $120 per chair. On July 5, Rutherford Corporation purchased 18 of these office chairs from Charlet for a list price of $200 each. Rutherford returned 3 of the chairs on July 7, paid one-half of its bill on July 16 and paid the other one-half of July 29. Charlet offers credit terms of 5/15, n/40 to its customers. Calculate the amount of gross profit Charlet Company earned from its sale to Rutherford Corporation.

Answer 1

Gross profit = $ 840.

Step-by-step explanation:

Charlet cost of purchasing = $120 per chair * total chairs purchased from suppliers

= $120 * 40 = $4800.

Rutherford:

Cost of purchasing = cost per price * chairs purchased

= $200 * 18 = $3600.

less: purchase return ( 3* 200) = ($600)

Net Purchases $3000.

Charlet Company

Gross profit =?

As we know that sales - cost = Gross profit. $

Charlet sales ( $200 each * 18 chairs) = 3600

less: Sales return ( 3*200) (600)

Net sales 3000

less : Cost of goods sold

(120 * 18) (2160)

Gross profit 840.