Mr. Bobson owns a hardware store. The gross sales for the first quarter of the year were $92,000. There was $1,930 in returned merchandise and $2,300 in sales discounts. His beginning merchandise inventory was $54,000 and his ending inventory was $40,000. He purchased $17,000 of additional merchandise for sale during the quarter, returned $1,750 worth of merchandise damaged during shipment, and received $3,800 in purchase discounts. Mr. Bobson's operating expenses include the following: delivery expense, $263; depreciation expense for equipment, $750; payroll taxes expense, $585; salary expense, $11,700; supplies, $395; and utilities expense, $420.
What is the gross profit for Bobson's Hardware?
A) $52,000
B) $62,320
C) $66,550
D) $87,770

Question

Quizplus · Accepted Answer

Gross profit = Net sales - Cost of goods soldNet sales = Gross sales - Returned merchandise - Sales discounts= $92,000 - $1,930 - $2,300= $87,770Cost of goods sold = Beginning inventory + Purchases - Ending inventory - Returned merchandise= $54,000 + $17,000 - $40,000 - $1,750= $30,250Gross profit = $87,770 - $30,250= $57,520

Mr Bobson Owns a Hardware Store