Question

A-Rod Fishing Supplies had sales of $2,500,000 and cost of goods sold of $1,710,000. Selling and administrative expenses represented 10 percent of sales. Depreciation was 6 percent of the total assets of $4,680,000.
What was the firm's operating profit?

Answer 1

Answer:

$259,200

Explanation:

A-Rod Fishing Supplies

Income Statement

Sales Revenue                                                                 $2,500,000

Less Cost of Sales                                                            ($1,710,000)

Gross Profit                                                                          $790,000

Less Operating Expenses

Selling and administrative expenses        $250,000

Depreciation expense                                $280,800     ($530,800)

Operating Profit                                                                  $259,200

thus,

the firm's operating profit is $259,200