Golden Oak Antique Shop had the following account balances at the end of the current accounting period: $$\begin{array} { | l | r | }
\hline \text { Beginning inventory } & \$ 73,000 \
\hline \text { Net purchases } & 58,250 \
\hline \text { Net sales revenue } & 87,500 \
\hline
\end{array}$$ The normal gross profit for the company is $45%. What was the company's estimated cost of goods sold for the accounting period?

Question

Golden Oak Antique Shop had the following account balances at the end of the current accounting period: $$\begin{array} { | l | r | } 
\hline \text { Beginning inventory } & \$ 73,000 \
\hline \text { Net purchases } & 58,250 \
\hline \text { Net sales revenue } & 87,500 \
\hline
\end{array}$$ The normal gross profit for the company is $45%. What was the company's estimated cost of goods sold for the accounting period?

Quizplus · Accepted Answer

The gross profit is 45% of sales, so the cost of goods sold is 55% of sales. Therefore, the estimated cost of goods sold is 55% of $87,500, which is $48,125.

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