Question

from the following, calculate (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 $7,600, gross sales $20,900, advertising expense $1,650, salary expense $2,900, and heat expense $900.

Answer 1

(a) Net sales is $19,250

(b) Gross profit is $11,650

(c) Total operating expenses are $7,338

(d) Net income is $4,312

Define Net income.

In both business and accounting, net income is the revenue of a firm less costs, depreciation and amortization, interest, and taxes for a particular accounting period.

Sales returns $700

Rent expense $1,288

Sales discounts $950

Depreciation expense $600

Cost of merchandise sold $7,600

Gross sales $20,900

Advertising expense $1,650

Salary expense $2,900

Heat expense $900

(a) net sales= Gross sales- sales returns - sales discount

                   = $20,900 - $700 - $950

                   = $19,250

(b) gross profit = 19,250 - 7,600

                        = $11,650

(c) total operating expenses = 1,288 + 600 + 1,650 + 2,900 + 900

                                               = $7,338

(d) net income= 11,650 - 7,338

                       = $4,312

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