The following balances appeared in the books of Tredwell Stores on 29 February 2016, the end of...
Question:
The following balances appeared in the books of Tredwell Stores on 29 February 2016, the end of the financial year:
| $ | |
| Purchases | 384,000 |
| Sales | 888,000 |
| Opening inventory | 60,000 |
| Closing inventory | 72,000 |
| Carriage on purchases | 30,000 |
The gross profit for the year ended 29 February 2016 is:
A. $344,000
B. $486,000
C. $462,000
D. None of the above
Gross Profit:
Gross Profit is also called as the gross margin. This amount is computed when the amount of cost of goods sold is deducted from the revenues. This is shown in a traditional format income statement.
Answer and Explanation: 1
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View this answerStep 1: Compute for the cost of goods sold. The carriage on purchases is also known as the freight in and will be considered as cost of inventories.
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