question archive A company opens its business in 20X1 and purchases merchandise on account for $88,000
A company opens its business in 20X1 and purchases merchandise on account for $88,000
Subject:BusinessPrice:2.88 Bought3
A company opens its business in 20X1 and purchases merchandise on account for $88,000. In 20X2, the company pays $67,000 cash on the $88,000 due, sales are $145,000, and ending inventory is $24,000. What is the company's gross profit for 20X2?
a. $57,000
b. $78,000
c. $81,000
d. $102,000
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Sales= $145,000
Purchases= $88,000
Ending inventory = $24,000
Cost Of Goods Sold = Opening Stock + Purchases- Closing Stock
Cost Of Goods Sold = 0+ $88,000- $24,000
Cost Of Goods Sold = $64,000
Gross Profit = Sales - Cost of Goods Sold
Gross Profit = $145,000- $64,000
Gross Profit = $ 81,000
Hence, Option C is correct.
