Answer:
a. The amount of gross profit is $3,402,000.
b. The gross profit percentage is 42%.
c. No, the income statement will NOT always report an operating income.
Explanation:
Given;
Sales revenue = $8,100,000
Cost of the goods sold = $4,698,000
a. What is the amount of the gross profit?
The gross profit can be calculated using the formula below:
Gross profit = Sales revenue - Cost of the goods sold = $8,100,000 - $4,698,000 = $3,402,000
Therefore, the amount of gross profit is $3,402,000.
b. Compute the gross profit percentage (gross profit divided by sales).
The gross profit percentage can be calculated using the following formula:
Gross profit percentage = (Gross profit / Sales revenue) * 100 = ($3,402,000 / $8,100,000) * 100 = 0.42 * 100 = 42%
Therefore, the gross profit percentage is 42%.
c. Will the income statement always report a operating income?
No, the income statement will NOT always report an operating income.
When the gross profit is greater than the operating expenses, the income statement will report an operating income.
However, when the gross profit is less than the operating expenses, the income statement will report an operating loss.
Therefore, the income statement will NOT always report an operating income.
