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6 June, 18:36

Using the information below, calculate gross profit for the period.

Sales revenues for the period $1,214,000

Operating expenses for the period $230,000

Finished Goods Inventory, January 1 35,100

Finished Goods Inventory, December 31 40,100

Cost of goods manufactured for the period $495,000

Answers: (A) $729,000. (B) $724,000. (C) $485,000. (D) $490,000. (E) $413,800.

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  1. 6 June, 18:39
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    The correct answer is B: $724,000

    Explanation:

    Giving the following information:

    Sales revenues for the period $1,214,000

    Operating expenses for the period $230,000

    Finished Goods Inventory, January 1 35,100

    Finished Goods Inventory, December 31 40,100

    Cost of goods manufactured for the period $495,000

    We need to calculate the gross profit.

    Gross profit = Sales revenue - cost of goods sold

    Cost of good sold = Beginning goods inventory + Cost of goods manufactured for the period - finished goods inventory

    COGS = 35100 + 495000 - 40100 = 490000

    Gross profit = 1214000 - 490000 = $724000
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