The following information relates to Nebula Ltd.
$$\begin{array} { | l | l | }
\hline \text { Sales revenue } & \$ 230,000 \
\hline \text { Cost of sales } & 150,000 \
\hline \text { Interest revenue } & 10,000 \
\hline \text { Operating expenses } & 40,000 \
\hline \text { Sales discounts } & 20,000 \
\hline \text { Sales returns and allowances } & 7000 \
\hline
\end{array}$$
Calculate the profit.
A) $230,000
B) $13,000
C) $23,000
D) $70,000

Question

The following information relates to Nebula Ltd.
$$\begin{array} { | l | l | } 
\hline \text { Sales revenue } & \$ 230,000 \
\hline \text { Cost of sales } & 150,000 \
\hline \text { Interest revenue } & 10,000 \
\hline \text { Operating expenses } & 40,000 \
\hline \text { Sales discounts } & 20,000 \
\hline \text { Sales returns and allowances } & 7000 \
\hline
\end{array}$$
Calculate the profit.
A) $230,000
B) $13,000
C) $23,000
D) $70,000

Quizplus · Accepted Answer

Profit is calculated as Sales Revenue - Cost of Sales - Operating Expenses + Interest Revenue - Sales Discounts - Sales Returns and Allowances. Thus, $230,000 - $150,000 - $40,000 + $10,000 - $20,000 - $7,000 = $23,000.

The Following Information Relates to Nebula Ltd Calculate the Profit