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21 March, 08:23

Beginning inventory is $55,000. purchases during the period were $45,000. during the year $80,000 of inventory was sold for $95,000. what is gross profit?

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  1. 21 March, 11:49
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    Hi there

    In the debt side of trading account there are

    Beginning inventory 55000

    Add Purchase 45000

    Total=100000

    In the credit side there are

    Sales 95000

    Ending inventory

    100000-80000=20000

    Total=115,000

    The difference between the debt side and the credit side is the gross p/l

    And since the amount of credit side is bigger than the amount of the debt side it's gross profit

    Gross profit=

    115,000-100,000=15,000 ... answer

    Good luck!
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