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QUESTION 25 Sheldon Company had 2,000 units of inventory costing $10,000 in beginning inventory at July 1st During July, ShelQUESTION 26 Sheldon Company had 2,000 units of inventory costing $10,000 in beginning inventory at July 1st. During July, SheQUESTION 27 Fede Company entered into the following business events during its first month of operations. The company uses th

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Answer #1

Answer 25:

B. $ 23,275

Answer 26:

C. $ 3,750

Explanation:

Date Particulars Purchases Cost of goods sold Closing Inventory
Units Cost per unit Amount ($) Units Cost per unit Amount ($) Units Cost per unit Amount ($)
Jul-01 Balance 2,000 5.00 10,000
Jul-03 Purchases 1,000 6.50 6,500
Jul-10 Purchases 1,200 7.00 8,400
Jul-24 Purchases 250 8.50 2,125
Sales 250 8.50            2,125
1,200 7.00            8,400
1,000 6.50            6,500
1,250 5.00            6,250 750 5 3,750
Total          23,275

Answer 27:

A. $ 7,726

Explanation: Gross margin is sales less net purchases

Calculation:

Gross Purchases: $ 12,500

Purchase Return = $ 1,200

Net purchases - $ 12,500 - $ 1,200 = $ 11,300

Discount to be received = $ 11,300 x 2% = $ 226

Net payment to be made = $ 11,300 - $ 226 = $ 11,074

Thus, net purchases = $ 11,074

Gross Margin = $ 18,800 - $ 11,074 = $ 7,726

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