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Using the following information, answer the questions. $198,000 Net sales 92,000 Purchases Purchases returns and allowances 1
Determine the cost of goods sold. Cost of Goods Sold Section Net purchases Cost of goods sold Determine the gross profit.
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Answer #1

Solution -

Computation of Cost of goods sold and gross profit

Cost of goods sold = Beginning merchandise inventory + Net Purchases + Freight in - Closing merchandise inventory

= $63000 + ($92000 -$1800 - $1250) +$1590 - $37000

Cost of goods sold = $116540

Gross profit = Sales - Cost of goods sold

= $198000 - $116540

Gross profit = $81460

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