Assume the Perpetual Inventory System Is Used

question 165

Multiple Choice

Assume the perpetual inventory system is used.1) Green Company purchased merchandise inventory that cost $64,000 under terms of 2/10, n/30 and FOB shipping point.2) Green Company paid freight cost of $2,400 to have the merchandise delivered.3) Payment was made to the supplier on the inventory within 10 days.4) All of the merchandise was sold to customers for $94,000 cash and delivered under terms FOB destination with freight cost amounting to $1,600.What is the amount of gross margin that results from these transactions?

• A)$31,280
• B)$27,280
• C)$28,880
• D)$29,680

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