We appreciate your visit to A business owner provided the following information at the end of his first year of trading closing inventory 15000 total payments to suppliers 60000 amount. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
To calculate the gross profit for the year, we need to determine the cost of goods sold (COGS) and the sales revenue. We can use the information given to find these two values.
Step 1: Determine Sales Revenue
The total receipts from customers are $85,000, and the amount owed by customers at the end of the year is $10,000. Thus, the total sales revenue can be calculated as follows:
[tex]\text{Total Sales Revenue} = \text{Total Receipts} + \text{Amount Owed by Customers}[/tex]
[tex]\text{Total Sales Revenue} = 85,000 + 10,000 = 95,000[/tex]
Step 2: Determine Cost of Goods Sold (COGS)
To find the COGS, use the formula:
[tex]\text{COGS} = \text{Opening Inventory} + \text{Purchases} - \text{Closing Inventory}[/tex]
Since the opening inventory is not given, we assume it to be $0, as this is the first year of trading. The purchases can be calculated by adjusting the payments to suppliers with the amount owing:
Purchases can be calculated as:
[tex]\text{Purchases} = \text{Total Payments to Suppliers} + \text{Amount Owing to Suppliers}[/tex]
[tex]\text{Purchases} = 60,000 + 5,000 = 65,000[/tex]
Now calculate COGS:
[tex]\text{COGS} = 0 + 65,000 - 15,000 = 50,000[/tex]
Step 3: Calculate Gross Profit
Finally, calculate the gross profit using the formula:
[tex]\text{Gross Profit} = \text{Total Sales Revenue} - \text{COGS}[/tex]
[tex]\text{Gross Profit} = 95,000 - 50,000 = 45,000[/tex]
Therefore, the gross profit for the year is $45,000. The correct answer is D) $45,000.
Thanks for taking the time to read A business owner provided the following information at the end of his first year of trading closing inventory 15000 total payments to suppliers 60000 amount. We hope the insights shared have been valuable and enhanced your understanding of the topic. Don�t hesitate to browse our website for more informative and engaging content!
- Why do Businesses Exist Why does Starbucks Exist What Service does Starbucks Provide Really what is their product.
- The pattern of numbers below is an arithmetic sequence tex 14 24 34 44 54 ldots tex Which statement describes the recursive function used to..
- Morgan felt the need to streamline Edison Electric What changes did Morgan make.
Rewritten by : Barada
