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)$31,200.
C)$58,800.
D)$59,500.

Question

Quizplus · Accepted Answer

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

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