The Following Data Were Extracted from the Accounting Records of Dana

question 70

Essay

The following data were extracted from the accounting records of Dana Designs for the year ended March 31.? $$\begin{array} { | l | r | } \hline \text { Merchandise inventory, April } 1 & \$ 530,000 \\\hline \text { Merchandise inventory, March } 31 & 375,000 \\\hline \text { Purchases } & 270,000 \\\hline \text { Purchases returns and all owances } & 25,000 \\\hline \text { Purchases discounts } & 10,000 \\\hline \text { Sales } & 770,000 \\\hline \text { Freight in } & 3,000 \\\hline\end{array}$$ Prepare the cost of merchandise sold section of the income statement for the year ended March 31, using the periodic method.??

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Definitions:

Zero Economic Profits

A situation in perfect competition where firms earn just enough revenue to cover all their costs, including opportunity costs, indicating no supernormal profit above the normal rate of return.

Long-Run Equilibriums

A state in which all factors of production and market forces are balanced and economic variables are not expected to change.

Implicit And Explicit Costs

Implicit costs are the opportunity costs of using resources that a firm already owns, while explicit costs are direct payment outflows for purchasing productive resources.

Differentiated Products

Goods or services that are distinguished from one another by quality, features, branding, or other attributes that consumers may perceive as unique or valuable.