A company\'s sales were $2,500,000 during 2012. Its cost of goods sold was $1,80

Question

A company's sales were $2,500,000 during 2012. Its cost of goods sold was $1,800,000 for that year. Which of the following will calculate cost of goods sold for the common-size income statement?

(2,500,000 - 1,800,000) divided by 1,800,000

(2,500,000 - 1,800,000) divided by 2,500,000

1,800,000 divided by 2,500,000.

Cannot be determined without information such as the company's net income for 2012.

Cannot be determined without information from 2011.

(2,500,000 - 1,800,000) divided by 1,800,000

(2,500,000 - 1,800,000) divided by 2,500,000

1,800,000 divided by 2,500,000.

Cannot be determined without information such as the company's net income for 2012.

Cannot be determined without information from 2011.

Explanation / Answer

Cannot be determined without information from 2011.

Cost of goods sold =opening + purchases - ending inventory

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