FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Jarvie loves to bike. In fact, he has always turned down better-paying jobs to work in bicycle shops where he gets an employee discount. At Jarvie’s current shop, Bad Dog Cycles, each employee is allowed to purchase four bicycles a year at a discount. Bad Dog has an average gross profit percentage on bicycles of 25 percent. During the current year, Jarvie bought the following bikes:
Description | Retail Price | Cost | Employee Price | |||
Specialized road bike | $ | 3,900 | $ | 2,500 | $ | 2,730 |
Rocky Mountain mountain bike | 4,500 | 3,900 | 3,600 | |||
Trek road bike | 3,400 | 2,100 | 2,380 | |||
Yeti mountain bike | 5,900 | 5,240 | 4,720 | |||
|
b. What amount of deductions is Bad Dog allowed to claim from these transactions?
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