New Hope, Inc is a merchandiser of stone ornaments
It sold 15,000 units during the year. The company has provided the following information:
Sales Revenue $525,000
Purchases (excluding Freight In) 347,000
Selling and Administrative Expenses 36,500
Freight In 15,500
Beginning Merchandise Inventory 42,000
Ending Merchandise Inventory 55,500
How much is the gross profit for the year?
A) $212,500
B) $349,000
C) $176,000
D) $178,000
C .C) Cost of Goods Sold = Beginning Merchandise Inventory + Purchases + Freight In - Ending Merchandise Inventory = $42,000 + $347,000 + $15,500 - 55,500 = $349,000
Gross Profit = Sales Revenue - Cost of Goods Sold = $525,000 - $349,000 = $176,000
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