Use the below information to calculate the (a) net sales, (b) gross profit, (c) total operating expenses, and (d) net income
Sales returns $700, Rent expense $1,288, Sales discounts $950, Depreciation expense $600, Cost of merchandise sold $7600, Gross sales $20,900, Advertising expense $1,650, Salary expense $2,900, Heat expense $900
Expert Answer
Net sales is = Gross sales – Sales returns – Sales discount
That is = $ 20,900 – $ 700 – $950 = $ 19,250/-
Gross proit is = Net sales – Cost of goods sold
That is = $ 19,250 – $ 7,600 = $ 11,650/-
Total operating expenses = Rent expenses + Heat expenses + salary Expense + depreciation expenses + advertising expenses = $ 1288+$900+$2900+$600+$1650
Total operating expenses = $ 7,388/-
Net income is = Gross profit – Operating expenses
Net income is = 11650-7388 =is $ 4,262/-.