Question

Newark Company has provided the following information: Cash sales, $640,000 Credit sales, $1,540,000 Selling and administrative expenses, $520,000 Sales returns and allowances, $109,000 Gross profit, $1,550,000 Increase in accounts receivable, $74,000 Bad debt expense, $52,000 Sales discounts, $62,000 Net income, $1,030,000 How much is Newark's cost of goods sold

Answer 1

Answer:

$459,000

Explanation:

Calculation to determine How much is Newark's cost of goods sold

First step is to calculate the Net sales

Net sales = $640,000 + $1,540,000 - $109,000 - $62,000.

Net sales =$2,009,000

Now let Calculate the cost of goods sold using this formula

Cost of goods sold=Net Sales -Gross profit,

Let plug in the formula

Cost of goods sold=$2,009,000-$1,550,000

Cost of goods sold= $459,000

Therefore the amount of Newark's cost of goods sold is $459,000