Assume the Perpetual Inventory Method Is Used

question 1

Multiple Choice

Assume the perpetual inventory method is used.
1) Marathon Company purchased merchandise inventory that cost $8,000 under terms of 2/10, n/30 and FOB shipping point.
2) Marathon paid freight cost of $500 on the merchandise.
3) Marathon made payment to the supplier within the discount period.
4) All of the goods were sold to customers on account for $12,000.
The gross margin from these transactions of Marathon Company is

• A) $3,060.
• B) $4,000.
• C) $3,660.
• D) $4,160.

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