Ivanhoe Wholesalers uses a perpetual inventory system.

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Stellar Stores purchases $9,400 of merchandise for resale from Ivanhoe Wholesalers, terms 2/10, n/30, FOB shipping point.

The correct company pays $175 for the shipping charges.

Stellar returns $1,200 of the merchandise purchased on March 1 because it was the wrong colour. Ivanhoe gives Stellar a $1,200 credit on its account.

Stellar Stores purchases an additional $12,000 of merchandise for resale from Ivanhoe Wholesalers, terms 2/10, n/30, FOB destination.

The correct company pays $$75 for freight charges.

Stellar returns $300 of the merchandise purchased on March 21 because it was damaged. Ivanhoe gives Stellar a $300 credit on its account.

Stellar paid Ivanhoe the amount owing for the merchandise purchased on March 1.

Stellar paid Ivanhoe the amount owing for the merchandise purchased on March 21. Additional information:

Mar.

Ivanhoe's cost of the merchandise sold to Stellar was $4,100.

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Ivanhoe's cost of the merchandise returned by Stellar was $523. As the merchandise was not damaged, it was returned to Ivanhoe's inventory.

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Ivanhoe's cost of the additional merchandise sold to Stellar Stores was $5,234.

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Ivanhoe's cost of the merchandise returned by Stellar was $131. As the merchandise was damaged, it was put in the recycling bin. Find net sales gross profit ja dn cogs dont forget to account for sales discounts and purchase discounts in the calculation 

To find the net sales, cost of goods sold (COGS), and gross profit for Ivanhoe Wholesalers, we'll need to account for all relevant transactions, including sales, returns, discounts, and shipping charges. Let's break down the problem step by step:

### Sales and Returns:

1. **March 2: Sale to Stellar Stores**
   - Sale amount: $9,400
   - Terms: 2/10, n/30 (2% discount if paid within 10 days)

2. **March 21: Return by Stellar Stores**
   - Return amount: $1,200

3. **March 22: Additional sale to Stellar Stores**
   - Sale amount: $12,000
   - Terms: 2/10, n/30 (2% discount if paid within 10 days)

4. **March 23: Return by Stellar Stores**
   - Return amount: $300

### Discounts and Payments:

1. **March 30: Payment for March 2 purchase**
   - Payment amount: $ \$9,400 - \$1,200 $ (returns) = \$8,200
   - Discount: 2% of \$8,200 = $ 0.02 \times 8,200 $ = \$164
   - Amount paid: $ \$8,200 - \$164 $ = \$8,036

2. **March 31: Payment for March 22 purchase**
   - Payment amount: $ \$12,000 - \$300 $ (returns) = \$11,700
   - Discount: 2% of \$11,700 = $ 0.02 \times 11,700 $ = \$234
   - Amount paid: $ \$11,700 - \$234 $ = \$11,466

### Net Sales Calculation:
\[ \text{Net Sales} = (\text{Total Sales}) - (\text{Sales Returns}) - (\text{Sales Discounts}) \]
- Total Sales: $ \$9,400 + \$12,000 = \$21,400 $
- Sales Returns: $ \$1,200 + \$300 = \$1,500 $
- Sales Discounts: $ \$164 + \$234 = \$398 $
\[ \text{Net Sales} = 21,400 - 1,500 - 398 = 19,502 \]

### Cost of Goods Sold (COGS) Calculation:
\[ \text{COGS} = (\text{Cost of Sold Goods}) - (\text{Cost of Returned Goods}) \]
- Cost of Sold Goods: $ \$4,100 + \$5,234 = \$9,334 $
- Cost of Returned Goods: $ \$523 + \$131 = \$654 $
\[ \text{COGS} = 9,334 - 654 = 8,680 \]

### Gross Profit Calculation:
\[ \text{Gross Profit} = \text{Net Sales} - \text{COGS} \]
\[ \text{Gross Profit} = 19,502 - 8,680 = 10,822 \]

### Summary:
- **Net Sales:** \$19,502
- **COGS:** \$8,680
- **Gross Profit:** \$10,822

Would you like more details or have any questions?

Here are five questions you might consider asking:
1. How is FOB shipping point different from FOB destination?
2. What is the significance of sales discounts in accounting?
3. How do you handle freight charges in inventory costing?
4. What is the impact of returns on net sales and gross profit?
5. How does a perpetual inventory system differ from a periodic inventory system?

**Tip:** Always double-check your calculations, especially when multiple transactions and returns are involved, to ensure accuracy in financial reporting.

Learn how to calculate net sales, cost of goods sold (COGS), and gross profit for Ivanhoe Wholesalers using accounting principles. This problem involves transactions such as sales, returns, discounts, and shipping charges.

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