Use this information to calculate the following:
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
B. Gross profit
C. Total operating expenses
D. Net Income
A. 7,600
B. 20,900
C. 7338.00
D. ?
Please help
To calculate the values, we use the following formulas:
A. Net Sales = Gross Sales - Sales Returns - Sales Discounts
B. Gross Profit = Net Sales - Cost of Merchandise Sold
C. Total Operating Expenses = Rent Expense + Depreciation Expense + Advertising Expense + Salary Expense + Heat Expense
D. Net Income = Gross Profit - Total Operating Expenses
Now let's calculate each value step by step:
A. Net Sales = $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
Therefore, the answers are:
A. Net Sales = $19,250
B. Gross Profit = $11,650
C. Total Operating Expenses = $7,338
D. Net Income = $4,312
To calculate the required values, follow these steps:
1. Net sales: Net sales is calculated by subtracting sales returns and sales discounts from gross sales.
Calculation: Gross sales - sales returns - sales discounts = Net sales
Calculation of Net sales: 20,900 - 700 - 950 = 19,250
Answer: A. Net sales = $19,250
2. Gross profit: Gross profit is calculated by subtracting the cost of merchandise sold (COGS) from net sales.
Calculation: Net sales - COGS = Gross profit
Calculation of Gross profit: 19,250 - 7,600 = 11,650
Answer: B. Gross profit = $11,650
3. Total operating expenses: The total operating expenses can be found by adding up all the given expenses (rent expense, advertising expense, salary expense, and heat expense).
Calculation: Rent expense + Advertising expense + Salary expense + Heat expense = Total operating expenses
Calculation of Total operating expenses: 1,288 + 1,650 + 2,900 + 900 = 6,738
Answer: C. Total operating expenses = $6,738
4. Net income: Net income can be calculated by subtracting total operating expenses and depreciation expense from gross profit.
Calculation: Gross profit - Total operating expenses - Depreciation expense = Net income
Calculation of Net income: 11,650 - 6,738 - 600 = 4,312
Answer: D. Net income = $4,312
Summary of the calculations:
A. Net sales = $19,250
B. Gross profit = $11,650
C. Total operating expenses = $6,738
D. Net income = $4,312