Question

Dobby's income statement lists net sales of $179,000 and a gross margin of $111,000. All other expenses not included in the gross margin totaled $46,500. What is Dobby's net income?

a. $31,500
b. $64,500
c. $111,000
d. $132,500

Answer 1

Dobby's net income is calculated by subtracting other expenses from the gross margin, resulting in a net income of $64,500.

Step-by-step explanation:

To calculate Dobby's net income, we need to subtract all expenses not included in the gross margin from the gross margin itself. According to the information provided, Dobby's gross margin is $111,000 and the total other expenses amount to $46,500.

Here's the calculation for the net income:

1. Start with the gross margin: $111,000.
2. Subtract the total other expenses: $111,000 - $46,500 = $64,500.

Therefore, Dobby's net income is $64,500, which corresponds to option b.