1)The credit terms 2/10, n/30 are interpreted as?

2% cash discount if the amount is paid within 10 days, with the balance due in 30 days.
10% cash discount if the amount is paid within 2 days, with balance due in 30 days.
30% discount if paid within 2 days.
30% discount if paid within 10 days.
2% discount if paid within 30 days.

2) A company's net sales were $676,600, its cost of good sold was $236,810 and its net income was $33,750. Its gross margin ratio equals?
5%.
9.6%.
35%.
65%.
285.7%.

3)A company's warehouse was destroyed by a tornado on March 15. The following information was the only information that was salvaged:

(1.) Inventory, beginning: $28,000
(2.) Purchases for the period: $17,000
(3.) Sales for the period: $55,000
(4.) Sales returns for the period: $700

The company's average gross profit ratio is 35%. What is the estimated cost of the lost inventory?
$ 9,705.
$25,995.
$29,250.
$44,000.
$45,000.

i pick

1)a
2)d
3)b
is these right

1) The credit terms 2/10, n/30 are interpreted as:

2% cash discount if the amount is paid within 10 days, with the balance due in 30 days.

2) To calculate the gross margin ratio, we need to subtract the cost of goods sold from the net sales and divide it by the net sales.
Gross Margin Ratio = (Net Sales - Cost of Goods Sold) / Net Sales
Gross Margin Ratio = ($676,600 - $236,810) / $676,600
Gross Margin Ratio = $439,790 / $676,600
Gross Margin Ratio ≈ 0.6499
The gross margin ratio is approximately 64.99%.

3) To estimate the cost of the lost inventory, we need to calculate the cost of goods sold using the average gross profit ratio.
Gross Profit = Net Sales - Cost of Goods Sold
Gross Profit = ($55,000 - $700) - (Beginning Inventory + Purchases)
Gross Profit = $54,300 - ($28,000 + $17,000)
Gross Profit = $54,300 - $45,000
Gross Profit = $9,300

Gross Profit Ratio = Gross Profit / Net Sales
35% = $9,300 / Net Sales
Net Sales = $9,300 / 0.35
Net Sales = $26,571.43

Cost of Goods Sold = Net Sales - Gross Profit
Cost of Goods Sold = $26,571.43 - $9,300
Cost of Goods Sold = $17,271.43

Therefore, the estimated cost of the lost inventory is $17,271.43.

1) The credit terms 2/10, n/30 mean that the buyer will receive a 2% cash discount if they pay the amount owed within 10 days. If the payment is not made within 10 days, then the full amount is due within 30 days.

2) To calculate the gross margin ratio, we need to subtract the cost of goods sold from the net sales and divide it by the net sales. In this case, the formula would be:

Gross Margin Ratio = (Net Sales - Cost of Goods Sold) / Net Sales

Given that the net sales were $676,600 and the cost of goods sold was $236,810, we can plug these values into the formula:

Gross Margin Ratio = ($676,600 - $236,810) / $676,600

This gives us a gross margin ratio of approximately 65%.

3) To estimate the cost of the lost inventory, we need to calculate the estimated sales using the average gross profit ratio. The formula is:

Estimated Sales = Net Sales / (1 + Gross Profit Ratio)

In this case, the net sales were $55,000 and the average gross profit ratio is 35%. Plugging these values into the formula:

Estimated Sales = $55,000 / (1 + 0.35)

This gives us an estimated sales of approximately $40,741. Then, we can calculate the estimated cost of the lost inventory by subtracting the estimated sales from the beginning inventory and adding the purchases and sales returns:

Estimated Cost of Lost Inventory = Beginning Inventory + Purchases - Sales Returns - Estimated Sales
= $28,000 + $17,000 - $700 - $40,741
= $3,559

Therefore, the estimated cost of the lost inventory is approximately $3,559.

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