Question

Eagle Corporation had beginning inventory of $22,000 and ending inventory of $23,000. Its net sales were $171,000 and net purchases were $95,000. Eagle's gross profit for the period is

Answer 1

Eagle Corporation's gross profit for the period is calculated by subtracting the cost of goods sold (COGS) from its net sales, which results in a gross profit of $77,000.

Step-by-step explanation:

To calculate Eagle Corporation's gross profit for the period, we need to determine the cost of goods sold (COGS) first, and then subtract that amount from its net sales.

The COGS is calculated as beginning inventory plus net purchases minus ending inventory. With the information provided:

• Beginning inventory: $22,000
• Ending inventory: $23,000
• Net purchases: $95,000
• Net sales: $171,000

We then calculate COGS as follows:
COGS = Beginning Inventory + Net Purchases - Ending Inventory
COGS = $22,000 + $95,000 - $23,000
COGS = $117,000 - $23,000
COGS = $94,000

Now, we can determine the gross profit:
Gross Profit = Net Sales - COGS
Gross Profit = $171,000 - $94,000
Gross Profit = $77,000

Therefore, Eagle Corporation's gross profit for the period is $77,000.