# At the beginning of the year, Wildcat Athletic had an inventory of $300000. During the year, the... ## Question: At the beginning of the year, Wildcat Athletic had an inventory of$300000. During the year, the company purchased goods costing $1200000. If Wildcat Athletic reported ending inventory of$450000 and sales of $1500000, their cost of goods sold and gross profit rate would be: a)$1050000 and 70%.

b) $1050000 and 30%. c)$750000 and 70%.

d) $750000 and 30%. ## Cost of Goods Sold and Gross Profit Rate: The cost of goods sold expense is the first expense item on the income statement of a trading company, and it is used to calculate the gross profit amount. When the gross profit amount is expressed as a percentage of sales revenue, it is called to gross profit rate or gross profit margin. ## Answer and Explanation: The cost of goods sold is: $1,050,000 Beginning inventory $300,000 Purchases 1,200,000 Goods available for sale$1,500,000 Ending inventory (450,000) Cost of Goods Sold

The gross profit rate is:

 30% ($450,000 /$1,500,000) Sales Revenue $1,500,000 Cost of Goods Sold (1,050,000) Gross Profit$450,000 Gross Profit Rate

The correct option is b)