Please help me solve this and show the steps. Thank you Recording Journal Entrie
ID: 2503823 • Letter: P
Question
Please help me solve this and show the steps. Thank you
Recording Journal Entries for Purchases and Sales Using a Perpetual Inventory System [LO 7-2, LO 7-5] Inventory at the beginning of the year cost $14,000. During the year, the company purchased (on account) inventory costing $87,000. Inventory that had cost $83,000 was sold on account for $97,400. At the end of the year, inventory was counted and its cost was determined to be $18,000. Calculate the cost of goods sold. What was the dollar amount of Gross Profit?Explanation / Answer
A) COST OF GOOD SOLD = 83000
B) GROSS PROFIT = 14400
WORKING:
A) COST OF GOOD SOLD = BEGINNING INVENTORY + PURCHASE - ENDING INVENTORY
COST OF GOOD SOLD = 14000+87000 - 18000
COST OF GOOD SOLD = 83000
B) GROSS PROFIT = SALE - COST OF GOOD SOLD
GROSS PROFIT = 97400 -83000
GROSS PROFIT = 14400