Chen's Department Store
Chen's Department Store is a merchandising company that uses the periodic inventory system.Selected account balances are listed below:
-Refer to the account information for Chen's Department Store.
Determine Chen's gross profit.

Question

Chen's Department Store
Chen's Department Store is a merchandising company that uses the periodic inventory system.Selected account balances are listed below: 
-Refer to the account information for Chen's Department Store.
Determine Chen's gross profit.

Quizplus · Accepted Answer

Gross profit is calculated as net sales minus cost of goods sold. Based on the given account balances, Chen's net sales are $260,000 ($190,000 + $70,000) and the cost of goods sold is $188,000 ($110,000 + $78,000) which gives us a gross profit of $72,000 ($260,000 - $188,000). Therefore, the best choice is B.

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