Will someone show me how to exactly workout costs of goods sold and gross profit

Question

Will someone show me how to exactly workout costs of goods sold and gross profit?

Assume that Mitchell Company uses a periodic inventory system and has these account balances: Purchases $620,000 Purchase Returns and Allowances $25,000 Purchases Discounts $11,000 Freight-ln $19,000 Beginning inventory of $45,000 Ending inventory of $55,000 Net sales of $750,000 Determine the amounts to be reported for cost of goods sold and gross profit Calculation of cost of goods sold Cost of goods sold Less: Purchases returns and allowances $45,000 $620,000 ....$25,000 11,000 36.000 584,000 Purchase discounts 19,000 Cost of goods purchased Cost of goods available for sale........................... Inventory, ending Cost of goods sold 603,000 648,000 55,000 Calculation of gross profit $750,000 593,000

Explanation / Answer

Calculate cost of goods sold :

Calculate gross profit :

Beginning inventory 45000 Purchase 620000 Purchase return and allowance 25000 Purchase discount 11000 (36000) Net purchase 584000 Freight in 19000 Cost of goods purchased 603000 Cost of goods available for sale 648000 Less: Ending inventory (55000) Cost of goods sold 593000

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