The company's gross profit based on the following is sales $48,000, sales returns and allowances $6,000, operating expenses $6,200, beginning inventory $900, net purchases $9,100, ending inventory $2,300.
A) $34,000
B) $43,000
C) $34,003
D) $34,300
E) None of these

Question

Quizplus · Accepted Answer

Gross profit = (Sales - Sales returns and allowances) - Cost of goods sold

Cost of goods sold = Beginning inventory + Net purchases - Ending inventory

Cost of goods sold = 900 + 9,100 - 2,300 = $7,700

Gross profit = (48,000 - 6,000) - 7,700 = $34,300

The Company's Gross Profit Based on the Following Is Sales