The given information states:
Sales: D195,000
Purchases: D160,000
Returns outwards: D880
Carriage inwards: D740
Returns inwards: D620
To calculate the cost of goods sold, we need to subtract the returns inwards and carriage inwards from the purchases:
Cost of Goods Sold = Purchases - Returns Inwards - Carriage Inwards
Cost of Goods Sold = D160,000 - D620 - D740
Cost of Goods Sold = D158,640
Gross Profit = Net Sales - Cost of Goods Sold
Gross Profit = D195,000 - D158,640
Gross Profit = D36,360