Answer:
The cost of goods sold and the ending inventory, respectively, were: $660,000 and $490,000
Explanation:
Saratoga Dress Co. had gross profit rate of 45%
Gross profit rate = (Gross Profit/ Sales)x 100%
Gross Profit = (Gross profit rate x Sales)/100% = (45% x $1,200,000)/100% = $540,000
Cost of Goods Sold = Sales - Gross Profit = $1,200,000 - $540,000 = $660,000
The ending inventory = the beginning inventory + purchasing merchandise - Cost of Goods Sold = $300,000 + $850,000 - $660,000 = $490,000
