Answer:
The cost of goods sold of the company equals $220,500.
Step-by-step explanation:
Cost of goods sold can be described as the carrying value of goods that a firm sold during a particular period.
Depending on the available data, cost of goods sold can be calculated using any of the following 2 formulas:
1. Cost of good sold = Beginning inventories + Purchases - Ending inventories
2. Cost of goods sold = Sales - Gross profit
Note that the second formula is derived from the gross profit formula (i.e. Gross profit = Sales - Cost of goods sold).
Since we are given sales of $380,400 and gross profit of $159,900, we then use the second formula as follows:
Cost of good sold = $380,400 - $159,900 = $220,500
Therefore, the cost of goods sold of the company equals $220,500.