Cost of goods sold and gross profit rate problem


At the beginning of the year, Midtown Athletic had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Midtown Athletic reported ending inventory of $600,000 and sales of $2,000,000, their cost of goods sold and gross profit rate must be:

a) $1,000,000 and 50%

b) $1,400,000 and 30%

c) $1,000,000 and 30%

d) $1,400,000 and 70%

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Accounting Basics: Cost of goods sold and gross profit rate problem
Reference No:- TGS081994

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