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19 July, 21:17

Tablets Company had the following information at December 31:Finished goods inventory, January 1 $ 30,000Finished goods inventory, December 31 90,000If the cost of goods manufactured during the year amounted to $1,260,000 and annualsales were $1,650,000, the amount of gross profit for the year is

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  1. 20 July, 00:12
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    Gross profit = $450,000

    Explanation:

    Giving the following information:

    December 31:

    Finished goods inventory, January 1 $ 30,000

    Finished goods inventory, December 31 90,000

    The cost of goods manufactured during the year amounted to $1,260,000

    Annual sales were $1,650,000.

    Gross profit = Sales - cost of goods sold

    cost of goods sold = beginning finished inventory + cost of goods manufactured - ending finished inventory = 30000 + 1260000 - 90000 = 1,200,000

    Gross profit = 1650000 - 1200000 = $450,000
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