Question

A-Rod Fishing Supplies had sales of $2,500,000 and cost of goods sold of $1,710,000. Selling and administrative expenses represented 10 percent of sales. Depreciation was 6 percent of the total assets of $4,680,000.

What was the firm's operating profit?

Answer 1

$259,200

Step-by-step explanation:

A-Rod Fishing Supplies

Income Statement

Sales Revenue $2,500,000

Less Cost of Sales ($1,710,000)

Gross Profit $790,000

Less Operating Expenses

Selling and administrative expenses $250,000

Depreciation expense $280,800 ($530,800)

Operating Profit $259,200

thus,

the firm's operating profit is $259,200