Question

A company reported the following:

Cost of Goods Sold $ 230,000
General, Selling, and Administrative Expenses 10,000
Income Tax Expense 9,700
Inventory 18,000
Net Income 27,900
Sales Revenue 285,000
Sales Discounts 3,900
Sales Returns and Allowances 3,050

What is the amount of gross profit?

Answer 1

The gross profit is $51950.

Step-by-step explanation:

To calculate the gross profit, we will make the extract of income statement that relates to Gross profit.

Sales Revenue 285000

Less: Sales Returns (3050)

Net Sales 281950

Less: Cost of Goods Sold (230000)

Gross profit 51950