Answer: $360,000
Explanation:
To solve the question, we needed to calculate the cost of goods sold first. This will be:
= Beginning Inventory + Purchases - Ending Inventory
= $280,000 + ($720,000 - $60,000) + $240,000
= $280,000 + $780,000 + $240,000
= $820,000
The net income or net loss will then be:
Sales = $1,880,000
Less: Cost of goods sold = $820,000
Gross profit = $1,060,000
Less: Operating expenses = $700,000
Net income = $360,000
The net income is $360,000
