Question

bolton industries has provided the following information: operating expenses were $405,000; income from operations was $260,000; net sales were $1,200,000; interest expense was $85,000; loss from sale of investments was $93,000; income tax expense was $52,500. what was bolton's gross profit?

Answer 1

Gross Profit = $145000

It can be solved with two methods one is by making reverse Income Statement or with the use of equations

Net Income                                                29500

Income Tax Expense                                 52500

Other expenses:

Loss from sale of investment                    93000

Interest Expense                                       85000

Income from Operations                           260000

Operating expenses                                 405000

Gross Profit                                              145000

Net sales                                                  1200000

What is Gross Profit?

Gross profit is determined by deducting opening stock, purchase and direct expenses from sales and closing stock. It can also be determined by deducting cost of goods from sales.

GROSS PROFIT = Sales - Direct expenses

The sale value of your goods less the cost of manufacturing it is your gross profit. It's the sale price of your services less the cost of a time it took to complete the task for a service-based business. Total sales (sometimes referred as the revenue or turnover) less the total cost of goods sold is another term for gross profit.

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