Please provide the solution to this general accounting question using proper accounting principles. Valley Distributors uses a perpetual inventory system. On August15, Valley sold merchandise worth $120,000 to a customer onaccount with terms 2/10, n/30. The cost of goods sold was $72,000.The customer paid on August 24.Calculate the amount of gross profit.

Step 1: Definition of Gross ProfitGross profit is the difference between sales revenue and the cost…

Answered: Valley Distributors uses a perpetual…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 7MCQ

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Carla Company uses the perpetual inventory system. The following information is available for January of the current year when Carla sold 1,600 units of inventory on January 14. Using the FIFO method, calculate Carlas cost of goods sold for January and its January 31 inventory.
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Jessie Stores uses the periodic system of calculating inventory. The following information is available for December of the current year when Jessie sold 500 units of inventory. Using the FIFO method, calculate Jessies inventory on December 31 and its cost of goods sold for December.
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Under the periodic inventory system, what account is debited when an estimate is made for the cost of merchandise inventory sold this year, but expected to be returned next year? (a) Estimated Returns Inventory (b) Sales Returns and Allowances (c) Merchandise Inventory (d) Customer Refunds Payable

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Valley Distributors uses a perpetual inventory system. On August 15, Valley sold merchandise worth $120,000 to a customer on account with terms 2/10, n/30. The cost of goods sold was $72,000. The customer paid on August 24. Calculate the amount of gross profit.