Detroit Company is a merchandising business that started its operations in 2014. During the year, Detroit reported sales of $450,000; inventory purchases of $310,000; and an inventory balance of $50,000 at the end of the year.
Required:
a. What was Detroit's cost of goods available for sale for 2014?
b. What was the cost of goods sold?
c. Calculate the amount of Detroit's gross margin for 2014 and the gross margin percentage.

Question

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The Answer of Detroit Company is a merchandising business that started its operations in 2014. During the year, Detroit reported sales of $450,000; inventory purchases of $310,000; and an inventory balance of $50,000 at the end of the year.
Required:
a. What was Detroit's cost of goods available for sale for 2014?
b. What was the cost of goods sold?
c. Calculate the amount of Detroit's gross margin for 2014 and the gross margin percentage.

Detroit Company Is a Merchandising Business That Started Its Operations