Question

For Mortenson Company, the following information is available: Cost of goods sold $130,000 Dividend revenue 5,000 Income tax expense 12,000 Operating expenses 46,000 Sales revenue 200,000 In Mortenson’s multiple-step income statement, gross profit: Group of answer choices should be reported at $75,000. should be reported at $70,000. should not be reported. should be reported at $17,000.

Answer 1

Answer: should be reported at $70,000.

Explanation:

Gross profit is the profit that is made by a business after the costs that are used during production has been deducted from the revenue gotten from sales. Therefore, the gross profit will be:

Sales revenue = $200,000

Less: cost of goods sold = $130,000

Gross profit = $200,000 - $130,000 = $70,000

Therefore, the gross profit should be reported at $70,000