Ballard Company Uses the Perpetual Inventory System

question 70

Multiple Choice

Ballard Company uses the perpetual inventory system. The company purchased $8,600 of merchandise from Andes Company under the terms 2/10, net/30. Ballard paid for the merchandise within 10 days and also paid $310 freight to obtain the goods under terms FOB shipping point. All of the merchandise purchased was sold for $16,200 cash. What is the amount of gross margin that resulted from these business events?

• A)$8,600
• B)$7,600
• C)$7,462
• D)$7,290

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Definitions:

Mg/dL

Milligrams per deciliter, a measurement unit used in medicine to denote the concentration of substances in the blood.

Elevated

Raised above the ground or a normal level; increased in position or status.

Dehydration

Withdrawal of water from the tissues naturally or artificially.

Sodium

A chemical element (symbol Na) that is a highly reactive metal and an essential nutrient for living beings, playing a critical role in nerve function and fluid balance.