Beginning inventory is $55,000. purchases during the period were $45,000. during the year $80,000 of inventory was sold for $95,000. what is gross profit?

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Business

Noemi Thornton

25 August, 08:10

Beginning inventory is $55,000. purchases during the period were $45,000. during the year $80,000 of inventory was sold for $95,000. what is gross profit?

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Answers (1)

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Valery Wolf · Answer 1

Hi there

In the debt side of trading account there are

Beginning inventory 55000

Add Purchase 45000

Total=100000

In the credit side there are

Sales 95000

Ending inventory

100000-80000=20000

Total=115,000

The difference between the debt side and the credit side is the gross p/l

And since the amount of credit side is bigger than the amount of the debt side it's gross profit

Gross profit=

115,000-100,000=15,000 ... answer

Good luck!