Question

Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. Gross profit equals?

Answer 1

Gross profit equals $420,000

Step-by-step explanation:

To get gross profit , we only discount the cost of goods sold from the Total sales

Gross profit Formula= net sales – cost of goods sold

Gross profit =$800,000- $380,000

Gross profit =$420,000

We use sales returns and allowances, sales discounts and operating expenses to get net income.