For the fiscal year, sales were $8,135,000, sales discounts were $795,000, sales returns and allowances were $475,000, and the cost of merchandise sold was $5,100,000.
a. What was the amount of net sales?
b. What was the amount of gross profit?
c. If total operating expenses were $1,350,000, could you determine net income?
Answer:
a. Net sales: $6,865,000 ($8,135,000 – $795,000 – $475,000)
b. Gross profit: $1,765,000 ($6,865,000 – $5,100,000)
c. No, there could be other income and expense items that could affect the amount of net income.