Assume Beta Company Uses the Perpetual Inventory Method and Engaged

question 46

Multiple Choice

Assume Beta Company uses the perpetual inventory method and engaged in the following transactions:
1) Purchased $5,000 of merchandise on account under terms 2/10, n/30.
2) Returned $600 (list price) of merchandise to the supplier before payment was made.
3) Paid the account payable within the discount period.
4) Sold the merchandise for $6,500 cash.
The amount of gross margin from the four transactions is

• A) $1,012.
• B) $1,500.
• C) $2,188.
• D) $2,100.

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Definitions:

Separate Legal Entity

A legal entity, such as a corporation, that is legally distinct from its owners, allowing it to own property, incur debts, and be sued independently.

Legal Fiction

A fact assumed or created by courts for legal reasons, especially one that is contrary to the actual fact, but is used to enable a legal decision.

Unpaid Taxes

Taxes owed to a government body that have not been paid by the specified due date.

Environmental Harm

Damage caused to the natural environment due to human activities or natural disasters, often leading to biodiversity loss, pollution, and climate change.