Question

ÂOaktree, Inc. is a merchandiser of inlaid wooden boxes. The company sold 7,500 units during the year. The company has provided the followingâ information:
Sales Revenue $566,000
Purchasesâ (excluding freightâ in) 305,000
Selling and Administrative Expenses 68,000
Freight In 13,000
Beginning Merchandise Inventory 45,000
Ending Merchandise Inventory 42,000

What is the cost of goods sold for theâ year?

A. $320,000
B. $362,000
C. $305,000
D. $318,000

Answer 1

Answer:

correct answer is A. $320,000

Explanation:

given data

sold  = 7,500 units

Sales Revenue =  $566,000

Purchases=  305,000

Selling and Administrative Expense =  68,000

Freight In =  13,000

Beginning Merchandise Inventory =  45,000

Ending Merchandise Inventory =  42,000

solution

we know that gross profit is equal to Sales minus Cost of goods sold   .......1

so first we get here gross profit that is

gross profit = ( sales revenue + ending inventory ) - ( beginning inventory + purchase + freight in )   .........1

gross profit = ( $566,000 + $42000 ) - ( $45000 + 305000 + $13000 )

gross profit = $245000

so cost of good sold will be from equation 1

cost of good sold = $566,000 - $245000 = 321000 so approx

so correct answer is A. $320,000