Golden Oak Antique Shop has the following account balances at the end of the current accounting period. A normal gross profit for the company is $45%. What is the company's estimated cost of goods sold for the accounting period?

Question

Golden Oak Antique Shop has the following account balances at the end of the current accounting period.  A normal gross profit for the company is $45%. What is the company's estimated cost of goods sold for the accounting period?

Quizplus · Accepted Answer

To find the estimated cost of goods sold, we need to use the formula:

Cost of Goods Sold = Total Sales - Gross Profit

We are given the gross profit percentage, so we can calculate the total sales by dividing the known gross profit by the gross profit percentage:

Total Sales = Gross Profit / Gross Profit Percentage
Total Sales = $63,750 / 0.45
Total Sales = $141,667

Now we can use the formula to find the estimated cost of goods sold:

Cost of Goods Sold = Total Sales - Gross Profit
Cost of Goods Sold = $141,667 - $63,750
Cost of Goods Sold = $77,917

Therefore, the closest answer choice is C) $47,025.

Golden Oak Antique Shop Has the Following Account Balances at the End