At the beginning of the year, the inventory of Yen's general merchandise was 175,000. The purchases made during the year amounted to 1,025,000. The invertory at the end of the year was 425,000. Yen's general merchandise salaries expense amounted to 235,000, while it's rental expense was 300,000. It also allocated 125,000 for utilities expense. The store received sales returns worth 55,000. The total sales of Yen's general merchandise was 1,575,000. What is the net profit/loss of Yen's general merchandise. Total sales
Less sales returns and allowances
Net sales
Cost of goods sold
Beginning inventory
Purchases
Cost of goods available for sale
Less ending inventory
Gross profit
Operating expenses
Net income/(loss)

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Vincenzo1989go Vincenzo1989go · Answer 1

Answer:

Net Profit/Income = 85,000

Solution:

Sales 1,575,000

Less: Sales Returns 55,000

Net Sales 1,520,000

Cost of Goods Sold:

Beginning Inventory 175,000

Add: Purchase 1,025,000

Goods Available for Sale 1,200,000

Less: Ending Inventory 425,000

Cost of Goods Sold 775,000

Gross Profit on Sales 745,000

Operating Expenses:

Salaries Expense 235,000

Rental Expense 300,000

Utilities Expense 125,000

Total Operating Expense 660,000

NET PROFIT 85,000

Note:

"Net Loss" (if TOTAL OPERATING EXPENSE is greater than GROSS PROFIT ON SALES)

"Net Profit/Income" (if TOTAL OPERATING EXPENSE is less than GROSS PROFIT ON SALES)