Quality Jewelers Uses the Perpetual Inventory System

question 100

Multiple Choice

Quality Jewelers uses the perpetual inventory system.On April 2,Quality sold merchandise for $50,000 to a customer on account with terms of 3/15,n/30.The allowances and returns on this sale amounted to $3,000 and $9,000,respectively.The cost of goods sold was $20,000.On April 20,Quality received payment from the customer.Calculate the amount of gross profit.

• A)$38,000
• B)$20,000
• C)$18,000
• D)$16,500

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Definitions:

Exercise Price

The price at which the holder of an options contract may buy or sell the underlying security.

Aggregate Supply Curve

The graphical representation of the total goods and services that producers in an economy are willing to sell at various price levels.

Price Level

The economy-wide average price for the entirety of goods and services produced.

Profit Per Unit

The amount of net income earned by selling one unit of a product, calculated as the sales price minus the cost of production per unit.