At the beginning of the year, Meng Company had an inventory of ¥400,000.During the year, the company purchased goods costing ¥1,600,000.If Meng Company reported ending inventory of ¥600,000 and sales of ¥2,000,000, the company's cost of goods sold and gross profit rate must be

Question

Quizplus · Accepted Answer

Beginning Inventory: ¥400,000
Purchases during the year: ¥1,600,000
Goods available for sale: ¥2,000,000 (400,000 + 1,600,000)
Ending Inventory: ¥600,000
Cost of Goods Sold: ¥1,400,000 (2,000,000 - 600,000)
Gross Profit: ¥600,000 (2,000,000 - 1,400,000)
Gross Profit Rate: 30% (Gross Profit/Sales) * 100 = (600,000/2,000,000) * 100 = 30%

Therefore, the correct answer is B) ¥1,400,000 and 30%.

At the Beginning of the Year, Meng Company Had an Inventory