McMillan Company Uses the Periodic Inventory System Required:
Calculate Each of the Following:
A

question 120

Essay

McMillan Company uses the periodic inventory system. It has compiled the following information in order to prepare the financial statements at December 31, 2014: $\begin{array}{lr}\text { Gross sales during 2014 } & \$ 2,000,000 \\\text { Sales returns and allowances during 2014 } & 50,000 \\\text { Beginning inventory, January 1,2014 } & 100,000 \\\text { Ending inventory, December 31, 2014 } & 120,000 \\\text { Purchases during 2014 } & 750,000\end{array}$ Required:
Calculate each of the following:
A. Cost of goods available for sale
B. Cost of goods sold
C. Gross profit

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Definitions:

Price Ceiling

A government-imposed limit on how high the price of a product can be charged in the market, intended to protect consumers from high prices.

Pounds of Berries

A unit of measure indicating the quantity of berries, communicated in terms of their total weight in pounds.

Producer Surplus

The difference between the amount that producers are willing to accept for a good or service and the actual amount they receive.

Market Equilibrium

A situation where the quantity demanded by consumers equals the quantity supplied by producers, resulting in a stable market price.