Question

​belstone, inc. is a merchandiser of stone ornaments. it sold​ 15,000 units during the year. the company has provided the following​ information: sales revenue $500,000 purchases​ (excluding freight​ in) 303,500 selling and administrative expenses 34,000 freight in 15,100 beginning merchandise inventory 43,000 ending merchandise inventory 56,000 how much is the gross profit for the​ year?

Answer 1

Gross profit for Belstone, Inc. is calculated by subtracting the Cost of Goods Sold from its sales revenue. The COGS is derived by adding purchases and freight in to the beginning inventory and then subtracting the ending inventory. The gross profit for the year is $194,400.

Step-by-step explanation:

To calculate the gross profit for Belstone, Inc., we need to assess the Cost of Goods Sold (COGS) and then subtract that amount from the sales revenue. The formula to calculate COGS is: Beginning Inventory + Purchases + Freight In - Ending Inventory. Using the provided figures:

• Beginning Inventory = $43,000
• Purchases = $303,500
• Freight In = $15,100
• Ending Inventory = $56,000

So, COGS = $43,000 + $303,500 + $15,100 - $56,000 = $305,600.

Thus, the gross profit = Sales Revenue - COGS = $500,000 - $305,600 = $194,400.