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Finding gross profit
Abbey Co. sold merchandise to Gomez Co. on account, $35,000, terms 2/15, net 45. The cost of merchandise sold is $24,500. Abbey Co. issued a credit memo for $3,600 for merchandise returned that originally cost $1,700. Gomez Co. paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co. on the above transactions?
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Take your sales of $35,000 minus the returned merchandise of $3,600 to get your net sales.
Net take your cost of merchandise of $24,500 minus the cost of merchandise returned of $1,700 to get your net cost of merchandise sold. Now simply take your net sales minus your net cost of merchandise sold to get your gross profit. |
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