Rice Co. sold for $12,000 inventory that had cost $8,000. Freight terms for the sale were FOB destination and payment terms were 1/10, n/30. Rice records sales transactions at the gross amount. Rice paid freight costs of $400 in cash. The receivable was collected within the discount period. Based on this information alone, the amount of gross margin would be: a. $3,480 b. $3,880 c. $3,600 d. $4,000
Rice Co. sold for $12,000 inventory that had cost $8,000. Freight terms for the sale were FOB destination and payment terms were 1/10, n/30. Rice records sales transactions at the gross amount. Rice paid freight costs of $400 in cash. The receivable was collected within the discount period. Based on this information alone, the amount of gross margin would be: a. $3,480 b. $3,880 c. $3,600 d. $4,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please provide correct solution
![Rice Co. sold for $12,000 inventory that had cost
$8,000. Freight terms for the sale were FOB
destination and payment terms were 1/10, n/30. Rice
records sales transactions at the gross amount. Rice
paid freight costs of $400 in cash. The receivable was
collected within the discount period. Based on this
information alone, the amount of gross margin
would be:
a. $3,480
b. $3,880
c. $3,600
d. $4,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5a558238-a96f-48de-b18e-6a9606877bb4%2Fb95b3d85-be3b-462d-bf67-bc843dff1ce1%2Fhf87voc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Rice Co. sold for $12,000 inventory that had cost
$8,000. Freight terms for the sale were FOB
destination and payment terms were 1/10, n/30. Rice
records sales transactions at the gross amount. Rice
paid freight costs of $400 in cash. The receivable was
collected within the discount period. Based on this
information alone, the amount of gross margin
would be:
a. $3,480
b. $3,880
c. $3,600
d. $4,000
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