Question

Concord Corporation had the following information at December 31: Finished goods inventory, January 1 $70000 Finished goods inventory, December 31 26000 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:

Gross profit= $1,055,000

Explanation:

Giving the following information:

Finished goods inventory, January 1 $70,000

Finished goods inventory, December 31 $26,000

Cost of goods manufactured= $1,895,000

Sales= $2,994,000

First, we need to calculate the cost of goods sold:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 70,000 + 1,895,000 - 26,000

COGS= $1,939,000

Now, the gross profit:

Gross profit= sales - cogs

Gross profit= 2,994,000 - 1,939,000

Gross profit= $1,055,000