Given the following data, the gross profit for the fiscal year would be__.
Freight-In on merchandise purchased $1,500; Merchandise Inventory, January 1 $30,000; Merchandise Inventory, December 31 $50,000; Purchases $100,000; Purchases discounts taken $2,800; Purchases returns and allowances $2,000; Sales $116,500; Sales returns and allowances $1,100.
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To calculate the gross profit for the fiscal year, we need to consider the following formula:
Gross Profit = Net Sales - Cost of Goods Sold
To calculate the cost of goods sold, we need to consider the following formula:
COGS = Opening Inventory + Purchases - Purchase Discounts - Purchase Returns and Allowances + Freight-In - Closing Inventory
Now, let's calculate the cost of goods sold and then the gross profit:
1. Calculate the Cost of Goods Sold:
Opening Inventory = Merchandise Inventory, January 1 = $30,000
Purchases = $100,000
Purchase Discounts = $2,800
Purchase Returns and Allowances = $2,000
Freight-In = $1,500
Closing Inventory = Merchandise Inventory, December 31 = $50,000
COGS = $30,000 + $100,000 - $2,800 - $2,000 + $1,500 - $50,000
COGS = $76,700
2. Calculate Gross Profit:
Net Sales = Sales - Sales Returns and Allowances
Net Sales = $116,500 - $1,100
Net Sales = $115,400
Gross Profit = $115,400 - $76,700
Gross Profit = $38,700
Therefore, the gross profit for the fiscal year would be $38,700.