Answer:
A) $49,200
B) $137,800
Explanation:
The net purchase is the total purchase less allowances. The movement in the balance of inventory at the start and end of a period is as a result of sales and purchases. While sales reduces the balance in inventory, purchases increases the balance. This may be expressed mathematically as
Opening balance + purchases - cost of goods sold = closing balance
$12,000 + $60,700 + $6,500 - cost of goods sold = $30,000
cost of goods sold = $12,000 + $60,700 + $6,500 - $30,000
= $49,200
Gross profit is the difference between the sales and the cost of goods sold
= $187,000 - $49,200
= $137,800
