Les Fleurs, a boutique in Paris, France, had the following accounts in its accounting records at December 31, 20X2 (amounts in Euros, denoted as "E")
Purchases………………...
E250,000 Freight In……………… E8,000
Sales discounts…………. 4,000 Purchase returns…….. 7,000
Inventory Sales…………………. 400,000
December 31, 20X1….. 20,000 Purchase discounts…. 3,000
December 31, 20X2….. 30,000 Sales returns…………. 8,000
Compute the following for Les Fleurs during 20X2: (Do not convert the figures to US dollars.)
Net sales revenue
Cost of goods sold
Gross profit
Can someone tell me if this looks good, please?
NET SALES REVENUE
Inventory Sales…………………. 400,000
Less: Sales returns…………. 8,000
Less: Sales discounts…………. 4,000
Net Sales Revenue = 388,000
Cost of goods sold
Purchases………………... E250,000
Add: Freight In……………… E8,000
Less: Purchase returns…….. 7,000
Less: Purchase discounts…. 3,000
Cost of good sold = 248,000
Gross Profit
Net Sales Revenue = 388,000
Less: Cost of good sold = 248,000
Gross Profit = 140,000
Yes, your calculations for net sales revenue, cost of goods sold, and gross profit are correct.
To calculate the net sales revenue, you start with the inventory sales of 400,000 Euros. Then you subtract any returns (8,000 Euros) and discounts (4,000 Euros) to arrive at a net sales revenue of 388,000 Euros.
To calculate the cost of goods sold, you begin with the purchases of 250,000 Euros. Then you add any freight costs (8,000 Euros) and subtract any purchase returns (7,000 Euros) and purchase discounts (3,000 Euros). This gives you a cost of goods sold of 248,000 Euros.
Finally, to find the gross profit, you subtract the cost of goods sold (248,000 Euros) from the net sales revenue (388,000 Euros), resulting in a gross profit of 140,000 Euros.