JCS Incorporated Experienced the Following Transactions During Its First Year

question 47

Multiple Choice

JCS Incorporated experienced the following transactions during its first year of business.The company purchased $16,000 of merchandise from Kent Company.The company paid $2,000 for selling and administrative expenses and purchased land for $5,000.All of the merchandise purchased was sold for $30,000 cash.What is the company's gross margin?

• A)$7,000
• B)$14,000
• C)$23,000
• D)$30,000

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Definitions:

Commission Charged

A fee paid to an employee or agent for facilitating a sale, typically a percentage of the sale amount.

Factor

A financial company that purchases receivables from businesses, providing them with immediate cash.

Impairment

Impairment is a reduction in the recoverable value of an asset below its carrying value, leading to an expense in the income statement.

Receivable

An amount of money owed to a company by its customers or clients for goods or services provided on credit.