The Following Information Is Available for the Tenor Music Store

question 64

Essay

The following information is available for the Tenor Music Store for the fiscal year ended December 31.
$\begin{array}{llr} \text {Ending inventory } &\$100,100\\ \text { Transportation-in costs } &\$8,900\\ \text { Purchase discounts } &\$15,000\\ \text { Beginning inventory } &\$79,000\\ \text { Merchandise cost } &\$450,000\\ \text { Purchase returns and allowances} &\$6,200\\ \text { Sales revenue} &\$800,000\\ \text { Sales discounts } &\$12,500\\\end{array}$

Required:
(a) Prepare a cost of goods sold statement for Tenor Music Store.
(b) Compute the gross margin for the fiscal year ended December 31.

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Definitions:

P = 4 + 3Q

A linear equation representing a direct relationship between price (P) and quantity (Q), where 4 is the fixed component, and 3 indicates the change in price per unit change in quantity.

Consumer Substitute

A product or service that consumers can choose as an alternative to another, similar product.

Supply Of Wheat

The quantity of wheat available in the market from producers at various price levels.

Price Of Wheat

The current market value at which wheat per unit (such as a bushel) can be bought or sold.