Question

A company reports the following information as of December 31st:Sales revenue $350,000 Cost of goods sold $150,000 Operating expenses $110,000 Foreign currency translation gain $25,000 Ignoring income taxes, what amount should the company report as net income as of December 31st?a. $125,000b. $90,000c. $150,000d. $115,000

Answer 1

Answer:

Option (b) is correct.

Explanation:

Given that,

Sales revenue = $350,000

Cost of goods sold = $150,000

Operating expenses = $110,000

Foreign currency translation gain = $25,000

Gross profit = sales revenue - cost of goods sold

                   = $350,000 - $150,000

                   = $200,000

Net income:

= Gross profit - Operating expenses

= $200,000 - $110,000

= $90,000