National Distributing Company uses a periodic inventory system to track its merchandise inventory and the gross profit method to
estimate ending inventory and cost of goods sold for interim periods. Net purchases for the month of August were $40,000. The July
31 and August 31, 2024, financial statements contained the following information:
Income Statements
For the Months Ending
August 31, 2024
July 31, 2024
Net sales
$\ 52,000
$\ 42,000
Balance Sheets at
August 31, 2024
July 31, 2024
Assets:
Merchandise inventory
$\ 36,000
$\ 35,000