The following merchandise transactions occurred in December.
Both companies use a perpetual inventory system.
Dec. | 3 | Flounder Ltd. sold goods to Novak Corp. for $70,000, terms n/15, FOB shipping point. The inventory had cost Flounder $37,200. Flounder’s management expected a return rate of 3% based on prior experience. | |
7 | Shipping costs of $960 were paid by the appropriate company. | ||
8 | Novak returned unwanted merchandise to Flounder. The returned merchandise has a sales price of $2,160, and a cost of $1,160. It was restored to inventory. | ||
11 | Flounder received the balance due from Novak. |
(c) Calculate the gross profit earned by Flounder on the above transactions.
Gross profit: _____________
.
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