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Question # 1: A retailer has yearly sales of $650,000. Inventory on January 1 is $250,000...

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

Solutions

Expert Solution

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

jeff jeffy answered 3 years ago
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