Answer:
Cost of goods sold = $573,000
Gross Profit = $177,000
Explanation:
Data provided in the question:
Purchases = $600,000
Purchase Returns and Allowances = $25,000
Purchases Discounts = $11,000
Freight-in = $19,000
Beginning inventory = $45,000
Ending inventory = $55,000
Net sales = $750,000
Now,
Total Goods Available for Sale =
Beginning Inventory + Purchases + Freight-In - Purchase Returns and Allowances - Purchases Discounts
= $45,000 + $600,000 + $19,000 - $25,000 - $11,000
= $628,000
Thus,
Cost of goods sold = Total Goods Available for Sale - ending inventory
= $628,000 - $55,000
= $573,000
Gross Profit = Net sales - Cost of goods sold
= $750,000 - $573,000
= $177,000
