In: Finance
Question # 1: A retailer has yearly sales of $650,000. Inventory on January 1 is $250,000 (at cost). During the year, $500,000 of merchandise (at cost) is purchased. The ending inventory is $275,000 (at cost). Operating costs are $90,000. a. Calculate the cost of goods sold b. Calculate the net profit
a. | |
Inventory on January 1 | 250000 |
(+) Merchandise purchased | 500000 |
(-) Endign inventory | 275000 |
Cost of goods sold | 475000 |
b. | |
Sales | 650000 |
(-) Cost of goods sold | 475000 |
Gross profit | 175000 |
(-) Operating costs | 90000 |
Net profit | 85000 |