Challenge tennis & recreation's operating activities for the year are listed below. purchases$174,000operating expenses62,000beginning inventory27,000ending inventory37,000sales revenue333,000what is the gross profit for the year? a) $159,000b) $333,000c) $97,000d) $169,000

D) $169,000

Explanation:

Gross profit is the measurement of profit after providing for cost of goods sold, it don not include any other operating or non-operating expenses.

Here, for the provided information we have,

Cost of goods sold = Opening Inventory + Purchases in the period - Closing inventory

Opening Inventory = $27,000

Purchases = $174,000

Closing Inventory = $37,000

Thus, cost of goods sold = $27,000 + $174,000 - $37,000 = $164,000

Sales Revenue = $333,000

Therefore, Gross profit = Sales Revenue - Cost of goods sold

= $333,000 - $164,000 = $169,000