Answer:
Gross profit= $1,055,000
Explanation:
Giving the following information:
Finished goods inventory, January 1 $70,000
Finished goods inventory, December 31 $26,000
Cost of goods manufactured= $1,895,000
Sales= $2,994,000
First, we need to calculate the cost of goods sold:
COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 70,000 + 1,895,000 - 26,000
COGS= $1,939,000
Now, the gross profit:
Gross profit= sales - cogs
Gross profit= 2,994,000 - 1,939,000
Gross profit= $1,055,000
