The following information appears on the income statement of the Richer Company at the end of the year. $\begin{array}{lr}
\text { Beginning finished goods inventory } & \$ 200,000 \
\text { Ending finished goods inventory } & 180,000 \
\text { Sales } & 360,000 \
\text { Cost of Goods Manufactured } & 120,000
\end{array}$ Gross Profit on Sales was:

Question

Quizplus · Accepted Answer

The Gross Profit is calculated by subtracting the Cost of Goods Sold from Sales. The Cost of Goods Sold is determined by adjusting the Cost of Goods Manufactured with the change in finished goods inventory. Thus, Gross Profit = $360,000 (Sales) - $140,000 (Cost of Goods Sold) = $220,000.

The Following Information Appears on the Income Statement of the Richer