Belstone, Inc. is a merchandiser of stone ornaments. It sold 15,000 units during the year. The company has provided the following information: $$\begin{array} { | l | r | }
\hline \text { Sales Revenue } & \$ 525,000 \
\hline \text { Purchases (excluding Freight In) } & 347,000 \
\hline \text { Selling and Administrative Expenses } & 36,500 \
\hline \text { Freight In } & 15,500 \
\hline \text { Beginning Merchandise Inventory } & 42,000 \
\hline \text { Ending Merchandise Inventory } & 55,500 \
\hline
\end{array}$$ How much is the gross profit for the year?

Question

Belstone, Inc. is a merchandiser of stone ornaments. It sold 15,000 units during the year. The company has provided the following information: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 525,000 \
\hline \text { Purchases (excluding Freight In) } & 347,000 \
\hline \text { Selling and Administrative Expenses } & 36,500 \
\hline \text { Freight In } & 15,500 \
\hline \text { Beginning Merchandise Inventory } & 42,000 \
\hline \text { Ending Merchandise Inventory } & 55,500 \
\hline
\end{array}$$ How much is the gross profit for the year?

Quizplus · Accepted Answer

To calculate gross profit, we need to deduct cost of goods sold (COGS) from the revenue. 
Given, 
Units sold = 15,000 
Revenue = $528,000 (15,000 x $35.20) 
Cost per unit = $22.40 
Therefore, 
COGS = 15,000 x $22.40 = $336,000 
Gross profit = Revenue - COGS = $528,000 - $336,000 = $192,000 
Therefore, the correct answer is (C) $176,000.

Belstone, Inc How Much Is the Gross Profit for the Year? A)

Belstone, Inc How Much Is the Gross Profit for the Year?
A)