Question

Escrow Company's multistep income statement shows cost of goods sold of $60,000, a gross margin of $42,000, operating income of $12,000 and a $20,000 loss on the sale of land. Based on this information, the net income or (net loss) amounted to

Answer 1

($8000)

Step-by-step explanation:

Given :

Cost of good sold = $60,000

Gross margin = $42,000

Operating income = $12,000

Loss on land sale = $20,000

Given a multistep income statement;

The net profit or (loss) is obtained by the difference in loss due to land sale and the operating income ;

The net profit(loss) = Operating income - Loss on land sale

The net profit (loss) = $12,000 - $20,000 =($8000)

Since, loss on lab sale is greater than operating income, then it is a loss