Answer to Question #241188 in Accounting for samantha

Question

SCI Question 3

SOLVE FOR COST OF GOODS SOLD

 

Gross Profit = 60% of net sales

Sales Discount = 120,000

Gross Sales= 900% of Sales Discounts

Answer 1

Solution:

Cost of goods sold = Net sales – Gross profit

Derive Gross profit and Net sales:

Gross sales = 900$\%$ of Sales Discounts

Sales Discount = 120,000

Gross sales = 900$\% \times$ 120,000 = 1,080,000

Net sales = Gross sales – Sales Discounts = 1,080,000 – 120,000 = 960,000

Gross Profit = 60$\%$ of net sales = 60$\% \times$960,000 = 576,000

Cost of goods sold = Net sales – Gross Profit = 960,000 – 576,000 = 384,000

 

Cost of goods sold = 384,000