A company reported the following: Cost of Goods Sold $250,000 General, Selling,
ID: 2560464 • Letter: A
Question
A company reported the following:
Cost of Goods Sold
$250,000
General, Selling, and Administrative Expenses
66,000
Income Tax Expense
4,500
Inventory
15,000
Net Income
13,000
Sales Revenue
355,000
Sales Discounts
3,400
Sales Returns & Allowances
2,900
Use the above information to answer the following question. What is the amount of gross profit?
$94,200.
$98,700.
$105,000.
$32,700.
Cost of Goods Sold
$250,000
General, Selling, and Administrative Expenses
66,000
Income Tax Expense
4,500
Inventory
15,000
Net Income
13,000
Sales Revenue
355,000
Sales Discounts
3,400
Sales Returns & Allowances
2,900
Explanation / Answer
Net sales=Sales-Sales discounts-Sales returns
=(355000-3400-2900)=348700
Gross profit=Net sales-COGS
=(348700-250,000)
=$98700(B)
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