For the year ended December 31,2016,Complex Company reported gross margin of $29,700,which was 30% of the sales for the period.The cost of goods available for sale was 120% of the cost of goods sold.The beginning inventory was twice as much as the ending inventory.What was the amount of purchases for 2016?

Question

Quizplus · Accepted Answer

D)GP = Sales - COGS
Beg inv + Purchases - End inv = COGS
29,700 / 0.30 = 99,000 × 0.70 = 69,300 × 1.20 = 83,160
(83,160 - 69,300)= 13,860 × 2 = 27,720
83,160 - 27,720 = 55,440

For the Year Ended December 31,2016,Complex Company Reported Gross Margin