Question

Sales revenue equals $367,810, sales returns and allowances are $10,000, and sales discounts total $14,180. The cost of goods sold is $216,490, operating expenses are $28,500, and the company incurs $31,640 of income tax expense. Which of the following statements is correct?

Answer 1

Answer:

Net Sales = $343,630

Gross Profit = $127,140

Net Income = $67,000

Explanation:

                            XYZ Company

                         Income Statement

               For the year ended, Dec 31, 20xx

   Particulars                                                     $

Sales Revenue                                            367,810

Less: Sales returns and allowances          (10,000)

Less: Sales discounts                                 (14,180)

Net Sales                                                    343,630

Less: Cost of goods sold                         (216,490)

Gross profit                                                127,140

Less: operating expenses                        (28,500)

Income from operation                               98,640

Less: Income tax expense                         (31,640)

Net Income                                                 67,000