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Financial information is presented below: Operating expenses $ 42000 Sales returns and allowances 8000 Sales discounts...

Financial information is presented below:

Operating expenses $ 42000
Sales returns and allowances 8000
Sales discounts 6000
Sales revenue 168000
Cost of goods sold 86000


The gross profit rate would be

0.56.

0.49.

0.44.

0.45.

Business   Accounting   
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Answer #1
Gross Profit is calculated on Net Sales
Net Sale means Sale recorded after Allownaces, Discount given and Retruns accepted
Sale Revenue 168000
Less:
Sales Return Allowances 8000
Sale Discounts 6000
Net Sales 152000
Less:
COGS 86000
Gross Profit 66000
Gross Profit Rate 66000/ 152000 = 0.4342 i.e 0.44 Approx
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