A furniture retailer has yearly sales of $1,800,000.Beginning-of-year inventory (at cost)equals $400,000;ending inventory (at cost)is $270,000.The yearly purchases are $700,000 and transportation charges are $5,700.The retailer's gross profit equals _____.

Question

Quizplus · Accepted Answer

Gross profit is calculated as Sales - Cost of Goods Sold (COGS). COGS = Beginning Inventory + Purchases + Transportation Charges - Ending Inventory = $400,000 + $700,000 + $5,700 - $270,000 = $835,700. Gross Profit = $1,800,000 - $835,700 = $964,300.

A Furniture Retailer Has Yearly Sales of $1,800,000