Answer:
$1,205,000
Explanation:
Given that,
Finished goods inventory, January 1 = $120,000
Finished goods inventory, December 31 = $226,000
Cost of goods manufactured during the year = $1,895,000
Annual sales = $2,994,000
Cost of goods sold:
= Finished goods inventory, January 1 + Cost of goods manufactured during the year - Finished goods inventory, December 31
= $120,000 + $1,895,000 - $226,000
= $1,789,000
Gross profit for the year:
= Annual sales - Cost of goods sold
= $2,994,000 - $1,789,000
= $1,205,000
