Cushman Company, Inc. had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. Net income equals:
A)$770,000.
B)$402,000.
C)$390,000.
D)$115,000.
E)$408,000.

Question

Quizplus · Accepted Answer

Net income is calculated as sales minus sales discounts, sales returns and allowances, cost of goods sold, and operating expenses. So, $800,000 - $12,000 - $18,000 - $380,000 - $275,000 = $115,000.