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

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.)

1. Net sales revenue
2. Cost of goods sold
3. Gross profit

Instructor Comments:
Length 2-3 paragraphs-
First and foremost when completing the assignment for Unit 4 IP1, DO NOT CONVERT THE EUROS TO US DOLLARS! Replace the word "Euros" in the problem with US $.

Remember, there are 3 parts to Unit 4 IP1: (1) calculate net sales revenue; (2) Calculate cost of goods sold; and (3) Calculate gross profit.

Don''t confuse purchase returns and allowances (which belong in the cost of goods calculation) and sales returns and allowances (which belong in the calculation of net sales revenue).

1. Net sales revenue

You can compute net sales revenue by deducting sales returns and discounts from the sales.

Sales E400,000
Less: Sales discounts 4,000
Sales returns 8,000 12,000
Net sales revenue 388,000

2. Cost of goods sold

Cost of goods sold:
Beginning inventory 20,000
Add: Purchases 250,000
Less: Purchase returns 7,000
Purchase discounts 3,000
Net purchases: 240,000
Add: Freight In 8,000 248,000
Goods available for sale 268,000
Less: Ending inventory 30,000
Cost of goods sold 238,000
3. Gross profit 150,000