Gannon Company had the following information at December 31: Finished goods inventory January 1 $ 50000
Finished goods inventory December 31 150000
If the cost of goods manufactured during the year amounted to $2200000 and annual sales were $2750000 the amount of gross profit for the year is

Question

Quizplus · Accepted Answer

The cost of goods sold can be calculated as the sum of the beginning finished goods inventory and the cost of goods manufactured during the year minus the ending finished goods inventory:

Cost of goods sold = $50,000 + $2,200,000 - $150,000 = $2,100,000

Gross profit can then be calculated as sales minus cost of goods sold:

Gross profit = $2,750,000 - $2,100,000 = $650,000

Therefore, the answer is choice C, $650,000.

Gannon Company Had the Following Information at December 31: Finished