Question

Parkside pool reports net sales of $625,000, gross profit of $275,000, and net income of $15,000. the company's cost of goods sold is:

Answer 1

The company's cost of good sold is $350,000. The cost of good sold is a cost which directly attributed to the inventory sold by a company. Gross profit is a portion of income which created by the selling of inventory ignoring other expense besides the cost of good sold. From the company's data, we can find the cost of good sold by finding the difference between net sales and gross profit, therefore the formula we have to use is "Cost of good sold = Net sales - gross profit".