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Cost of good sold and gross profit

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At the end of Gordman Department store's fiscal year on December 31, 2008, these accounts appeared in its adjusted trial balance...
Freight -in $5,600
Merchandise Inventory 40,500
Purchases 447,000
Purchase Discounts 12,000
Purchase returns and allowances 6,400
Sales 718,000
Sales Return and allowance 8,000

Additional facts:
1. Merchandise inventory on December 31, 2008 is $75,000.
2. Note that Gordman Department store uses a periodic system.

Prepare an income statement through gross profit for the year ended December 31, 2008.

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Solution Summary

The solution explains how to calculate the cost of goods sold and the gross profit

Solution Preview

In order to prepare the income statement we need to first calculate the cost of goods sold
Cost of goods sold = Goods available for sale - ending ...

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