Question

Bonita Industries had the following information at December 31: Finished goods inventory, January 1 $120000 Finished goods inventory, December 31 226000 If the cost of goods manufactured during the year amounted to $1895000 and annual sales were $2994000, how much is the amount of gross profit for the year?

Answer 1

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