Question

8. Martha sold some stock purchased several years ago for $20,000 at a sale price of $15,000. She paid a $20 commission on the sale. How much gross income would be included from this sale?

Answer 1

Sales 15,000

Purchases 20,000

Gross income (5,000)

Less operating expenses (20)

Net income (520)$

1.For a company, gross income equates to gross margin, which is sales minus the cost of goods sold. Thus, gross income is the amount that a business earns from the sale of goods or services, before selling, administrative, tax, and other expenses have been deducted.

2.Sales commissions expense” and the amount of the expense as a line item in the operating expenses section of your income statement at the end of the accounting period.

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