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Johnson Co. sold inventory for $15,000 that had cost $9,000. Freight terms were FOB destination and payment terms were 2/10, n/30. Johnson records sales transactions at the gross amount. Johnson paid freight costs of $500 in cash. The receivable was collected within the discount period. Based on this information alone, the amount of gross margin would be: a. $5,200 b. $5,500 c. $5,700 d. $6,000

Johnson Co. sold inventory for $15,000 that had cost $9,000. Freight terms were FOB destination and payment terms were 2/10, n/30. Johnson records sales transactions at the gross amount. Johnson paid freight costs of $500 in cash. The receivable was collected within the discount period. Based on this information alone, the amount of gross margin would be: a. $5,200 b. $5,500 c. $5,700 d. $6,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Johnson Co. sold inventory for $15,000 that had cost $9,000. Freight terms were FOB destination and payment terms were 2/10, n/30. Johnson records sales transactions at the gross amount. Johnson paid freight costs of $500 in cash. The receivable was collected within the discount period. Based on this information alone, the amount of gross margin would be: a. $5,200 b. $5,500 c. $5,700 d. $6,000
Transcribed Image Text:Johnson Co. sold inventory for $15,000 that had cost $9,000. Freight terms were FOB destination and payment terms were 2/10, n/30. Johnson records sales transactions at the gross amount. Johnson paid freight costs of $500 in cash. The receivable was collected within the discount period. Based on this information alone, the amount of gross margin would be: a. $5,200 b. $5,500 c. $5,700 d. $6,000
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