Calculate gross profit if sales are $90,000, inventory at beginning is $5,600, purchases of inventory are $30,500 and inventory at end is $4,900.
A) $41,000
B) $59,500
C) $31,200
D) $58,800

Question

Quizplus · Accepted Answer

Gross profit is calculated as Sales minus Cost of Goods Sold (COGS). COGS is calculated as: Beginning Inventory + Purchases - Ending Inventory. Here, COGS = $5,600 + $30,500 - $4,900 = $31,200. Therefore, Gross Profit = $90,000 - $31,200 = $58,800.

Calculate Gross Profit If Sales Are $90,000, Inventory at Beginning