Use the information below to answer the question that follows Sales--------------- 120,000 Purchase-----------100,000 Opening stock-----10,000 Closing stock...
Question 1 Report
Use the information below to answer the question that follows
Sales--------------- 120,000
Purchase-----------100,000
Opening stock-----10,000
Closing stock------20,000
The gross profit or loss is?
Answer Details
The gross profit is Le 30,000 profit.
To calculate gross profit, we subtract the cost of goods sold (COGS) from the sales revenue. COGS is the cost of the inventory sold during the period, and it includes the cost of opening inventory plus the cost of purchases, minus the cost of closing inventory.
The calculation for COGS is:
COGS = Opening stock + Purchases - Closing stock
= 10,000 + 100,000 - 20,000
= 90,000
Therefore, the gross profit is:
Gross profit = Sales - COGS
= 120,000 - 90,000
= Le 30,000 profit
Hence, the correct answer is Le 30,000 profit.
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