Question

In: Accounting

Dayton company had sales revenue of $900,000 for the year. Inaddition, the following information is...

Dayton company had sales revenue of $900,000 for the year. In addition, the following information is available related to the cost of the units sold:

Beginning Inventory	$ 480,000
Purchases	233,000
Freight-in	8,300
Purchase Discounts	25,000
Purchases Allowances	5,300
Operating expenses	177,000
Ending inventory	243,000

At what amount would the company report gross profit?

A. $439,700

B. $452,000

C. $460,300

D. $430,000

Expert Solution

Sales revenue = $900,000

Cost of goods sold = Beginning inventory + Purchases- Purchase discount - Purchases allowance + Freight in+ Ending inventory

= 480,000+233,000-25,000-5,300+8,300-243,000

= $448,000

Gross profit = Sales revenue - Cost of goods sold

= 900,000-448,000

= $452,000

The company report gross profit = $452,000

Correct option is B.

ekkarill92 answered 3 years ago

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