Financial information is presented below: $$\begin{array} { l r }
\text { Operating expenses } & \$ 35,000 \
\text { Sales returns and allowances } & 12,000 \
\text { Sales discounts } & 3,000 \
\text { Sales revenue } & 140,000 \
\text { Cost of goods sold } & 85,000
\end{array}$$ Gross profit would be
A) $40,000.
B) $43,000.
C) $55,000.
D) $52,000.

Question

Financial information is presented below: $$\begin{array} { l r } 
\text { Operating expenses } & \$ 35,000 \
\text { Sales returns and allowances } & 12,000 \
\text { Sales discounts } & 3,000 \
\text { Sales revenue } & 140,000 \
\text { Cost of goods sold } & 85,000
\end{array}$$ Gross profit would be
A) $40,000.
B) $43,000.
C) $55,000.
D) $52,000.

Quizplus · Accepted Answer

Gross profit is calculated as sales revenue minus cost of goods sold. In this case, gross profit is $140,000 - $85,000 = $55,000. However, sales returns and allowances and sales discounts are deducted from sales revenue to arrive at net sales. Therefore, gross profit is $55,000 - $12,000 - $3,000 = $40,000.

Financial Information Is Presented Below Gross Profit Would Be A) $40,000

Financial Information Is Presented Below Gross Profit Would Be
A) $40,000