At the beginning of the year, Wildcat Athletic had an inventory of $300,000.During the year, the company purchased goods costing $1,200,000.If Wildcat Athletic reported ending inventory of $450,000 and sales of $1,500,000, their cost of goods sold and gross profit rate would be
A)$750,000 and 70%
B)$1,050,000 and 30%.
C)$750,000 and 30%.
D)$1,050,000 and 70%.

Question

Quizplus · Accepted Answer

Cost of Goods Sold (COGS) is calculated as: Beginning Inventory + Purchases - Ending Inventory = $300,000 + $1,200,000 - $450,000 = $1,050,000. Gross Profit is Sales - COGS = $1,500,000 - $1,050,000 = $450,000. Gross Profit Rate is Gross Profit / Sales = $450,000 / $1,500,000 = 30%.

At the Beginning of the Year, Wildcat Athletic Had an Inventory