XYZ Inc. had the following figures in its income statement: Sales $920,000 Cost of Goods Sold $320,000 Gross Profit___Other Income $50,000 Salaries $220,000 Advertising $100,000 Rent $80,000 Other Expenses $50,000 Net Profit____The net profit figure is: a) $650,000 b) $150,000 c) $600,000 d) $200,000
Answers
Answer:
answer is option(a) $200,000
Explanation:
sales-cogs=920000-320000=600000
therefore gross profit is $600000
so , debit side:
salaries+advertising +rent+other expenses=?
220000+100000+80000+50000=450000
credit side:
other income +gross profit=50000+600000=650000
difference=650000-450000=200000
The net profit figure is $200,000
Option D is the correct answer.
given:
Sales $920,000
Cost of Goods Sold $320,000
Other Income $50,000
Salaries $220,000
Advertising $100,000
Rent $80,000
Other Expenses $50,000
To find:
Gross Profit
Net Profit
solution:
we have to find gross profit and then prepare profit and loss accout to find the net profit.
calculation of gross profit:
gross profit = sales - cost of goods sold
gross profit = $920,000 - $320,000
= $ 600,000
The calculation of Net profit:
gross profit = $ 600,000
add: other income = $50,000
$ 650,000
less: salaries = ($220,000)
advertising ($100,000)
rent ($80,000)
other expenses ($50,000)
Net profit: $200,000
Refer to the attached illustration for the P&L a/c
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