Zorro Company buys from wholesalers and resells a single product that costs $10 each unit. All purchases are paid in cash. There is asales commission paid of 20% on each unit sold. Sales commissions and sales proceeds are also all in cash. Each unit sells for $30. Inyear 1 the firm purchased 20,000 units and sold 15,000 units. In year 2 it purchased 20,000 units and sold 16,100 units. The firm usesFIFO inventory method for inventory costing.Required 1: Assuming no other transaction happened, the amount of gross Sales Revenue in year 2 is: $Required 2: Assuming no other transaction happened, the amount of gross margin on sales in year 2 is: $Required 3: Assuming no other transaction happened, what was the profit on sales for year 2? $

FIFO stands for "first-in, first-out," and it is an inventory accounting method that assumes that…

Required 1: Assuming no other transaction happened, the amount of gross Sales Revenue in year 2 is: $ Required 2: Assuming no other transaction happened, the amount of gross margin on sales in year 2 is: $ Required 3: Assuming no other transaction happened, what was the profit on sales for year 2? $

Required 1: Assuming no other transaction happened, the amount of gross Sales Revenue in year 2 is: $ Required 2: Assuming no other transaction happened, the amount of gross margin on sales in year 2 is: $ Required 3: Assuming no other transaction happened, what was the profit on sales for year 2? $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

2. Under accrual basis, what amount should be reported as gross purchases? a. 5,250,000 b. 5,950,000 c. 5,750,000 d. 5,650,000 3. What amount should be reported as cost of goods sold under accrual basis? a. 5,550,000 b. 5,750,000 c. 4,950,000 d. 5,350,000
Showing 1-6 of 6 items. 1. Which of the following statements is true? Gross margin = Net sales - Cost of goods sold ONet sales + Cost of goods sold Gross margin Gross margin - Cost of goods sold = Net sales Net sales + Gross margin = Cost of goods sold
Which of the statements below is TRUE? a. Receivables turnover is accounts receivable divided by sales. b. Inventory turnover is cost of goods sold divided by accounts receivables. c. Total asset turnover is profits divided by total assets. d. A higher inventory turnover ratio signifies that inventory is moving faster.
When sales are made with a right of return, the company_ а. should recognize revenue for the full sales price b. should not recognize any revenue С. record the estimated returns in the Sales Returns account O d. records the returned asset in a separate inventory account
Gross profit minus total operating expenses is called ____________. Group of answer choices income from operations primary revenue secondary revenue other income
The equation for Gross Profit is "Gross Profit = Revenues - Cost of Goods." Which of the following would increase the Gross Profit?
S1 - Net income remains the same when revenue is treated as other income, additional revenue, deduction from cost of goods sold, or as deduction from production cost of main product. S2 - In the reversal cost method, the manufacturing cost of the main product is reduced by the actual revenue from the by products. a. Only S1 is true b. Only S2 is true c. Both S1 & S2 are true d. Both S1 & S2 are false
Indicate the effects on gross profit the changes in volume, unit selling price, and unit cost. Write an “X” on the appropriate and explained Effects in Gross Profit Favorable Unfavorable A. Volume - Increase - Decrease B. Selling Price – Increase - Decrease C. Unit Cost - Increase - Decrease
Moving to another question will save this response. Question 4 Net Sales are calculated using: O A. Gross sales, cost of good available for sale, cost of goods sold O B. Gross sales, cost of goods sold, sales expenses C. Gross sales, cost of sales, purchases O D. Gross sales, sales returns & allowances, sales discount Moving to another question will save this response.
Statement 1: Under accrual basis, net sales is computed as the difference between sales returns and discounts and collections on credit sales. Statement 2: Under cash basis, net purchases is computed as the difference between purchase returns and discounts and payments on purchases. a. Both statements are true c. Only statement 1 is true b. Both statements are false d. Only statement 2 is true
What is the impact on profit for the year if income overstated? a. no effect b. profit will be overstated c. cannot be determined due to insufficient information d. profit will be understated
I need help with the process