Question

Tuity Fruity Beverage Company's operating activities for the year below are listed:Purchases $140,000Operating expenses 80,000Beginning inventory 12.000ending inventory 18,000sales revenue 300,000What is the gross profit for the year?(a) $166,000(b) $300,000(c) $80,000(d) $160,000

Answer 1

Answer: Option (A) is correct.

Explanation:

Given that,

Purchases = $140,000

Operating expenses = $80,000

Beginning inventory = $12,000

Ending inventory = $18,000

Sales revenue = $300,000

Goods available = Beginning inventory + Purchases

                           =  $12,000 + $140,000

                           = $152,000

Cost of goods sold = Goods available - Ending inventory

                                = $152,000 - $18,000

                                = $134,000

Gross profit = Sales revenue - Cost of goods sold

                    = $300,000 - $134,000

                    = $166,000