Question

Dickson Inc. uses the perpetual inventory system. The company sold 500 units to Ajax Ltd. for a total sales price of $5,000. At the time of the sale, Dickson carried the inventory on its books at a cost of $3,000. If Ajax returns 50 units for a full refund, the net effect of recording the return will cause Dickson's:

Answer 1

Answer:$2000

Explanation:

The cost per unit of stock is $6 i.e $3000/500 units, the selling price per unit is $10 i.e $5000/500.

The profit per unit is 4 ( $10-$4)multiply by 500 units gives $2000 the net effect of recording the return.