An electronics retailer has yearly sales of $1,000,000; its beginning-of-year inventory (at cost)is $400,000 and its ending inventory (at cost)is $410,000.The retailer's annual purchases are $700,000 and transportation charges equal $25,000.The retailer's gross profit equals ________.

Question

Quizplus · Accepted Answer

To calculate the retailer's gross profit, we first determine the cost of goods sold (COGS). COGS is calculated as: Beginning Inventory + Purchases + Transportation Charges - Ending Inventory. Plugging in the given values: $400,000 + $700,000 + $25,000 - $410,000 = $715,000. The gross profit is then calculated as Sales - COGS: $1,000,000 - $715,000 = $285,000.

An Electronics Retailer Has Yearly Sales of $1,000,000; Its Beginning-Of-Year