At the beginning of the year, Culver had an inventory of $350000. During the year, the company purchased goods costing $1230000. If Culver reported ending inventory of $480000 and sales of $1900000, their cost of goods sold and gross profit rate would be

Answer: cost of goods sold = $1,100,000

Gross profit = $800,000

Explanation: As we know that : -

Gross profit = Sales - Cost of goods sold

Now we can compute cost of goods sold using following formula : -

Cost of goods sold = opening inventory + purchase - closing inventory

putting the values into equation we get : -

Cost of goods sold = $350,000 + $1,230,000 - $480,000

= $1,100,000

Therefore,

Gross profit = $1,900,000 - $1,100,000

= $800,000