A company has cost of goods available for sale of $500,000,sales of $574,000,and a gross profit percentage of 30 percent.Using the gross profit method,what is the ending inventory?

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Quizplus · Accepted Answer

The gross profit is 30% of sales, so gross profit = 0.30 * $574,000 = $172,200. Cost of goods sold (COGS) = Sales - Gross Profit = $574,000 - $172,200 = $401,800. Ending inventory = Cost of goods available for sale - COGS = $500,000 - $401,800 = $98,200.

A Company Has Cost of Goods Available for Sale of $500,000,sales