BP GmbH used a perpetual inventory system and had the following transactions during a particular month: (a) Purchased merchandise for $25.000 on account. Credit terms: 2/10, n/30. (b) Paid freight bill of $470 , for merchandise purchased in (a). (c) Paid for merchandise purchased in (a) by taking all discounts to which it was entitled. (d) Sold merchandise for $15.000 to a customer on account. The cost of merchandise sold was $9.000 . Credit terms: 2/10, n/30. (e) $1.000 of merchandise sold in (d) was returned. The cost of merchandise returned was $600. Assuming that there were no other transactions, what would be the gross profit in this particular month?
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Sales: 14,000 (15,000 sales - 1,000 returns)
Cost of Sales: 8,400 (9,000 cost of sales - 600 cost of returns)
Gross Profit: 5,600
The purchase of stock, the credit terms and the payment via discounts are all balance sheet transactions, so have no impact on profit.
This appears to be a textbook question, so I'm not sure why it had to be posted anonymously. Please note the following guidance on how to use this forum:
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Perhaps it's the poor wording of the question, but discounts taken (and given) do usually affect the profit and loss.