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In 2008, Doolan Company sold 10,000 units of inventory at twice their purchase price of $27.50...

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Accounting

In 2008, Doolan Company sold 10,000 units of inventory at twicetheir purchase price of $27.50 each.   In 2009, Doolanhad a gross profit of $200,000 and cost of goods sold of$225,000.

A. What were Doolan’s sales in 2008?

B. What was Doolan’s gross profit in 2008?

C. What were Doolan’s sales in 2009?

D. What was Doolan’s gross profit percentage in 2009?

Answer & Explanation Solved by verified expert
4.0 Ratings (648 Votes)

A.

Doonal’s Sales in 2008 = Unit sales price x No. of units sold

                     = $ 27.5 x 2 x 10,000 = $ 550,000

B.

Doonal’s Gross profit in 2008 = (Sales price – Purchase price) x No. of units sold

                                     = ($ 55 - $ 27.5) x 10,000

                                     = $ 27.5 x 10,000 = $ 275,000

C.

Doonal’s Sales in 2009 = Cost of goods sold + Profit

                        = $ 225,000 + $ 200,000 = $ 425,000

D.

Doonal’s Gross profit percentage in 2009 = (Gross profit/Sales) x 100

                                          = ($ 200,000/$ 425,000) x 100

                                          = 0.470588235 x 100 = 47.06 %
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