Assume that the Acct 201 Co. has $1,000,000 in Sales ($600,000 on account; $400,000 for cash), Cost of merchandise sold of $100,000 and Operating expenses of $300,000. Acct 201's Gross profit is:
Assume that the Acct 201 Co. has $1,000,000 in Sales ($600,000 on account; $400,000 for cash), Cost of merchandise sold of $100,000 and Operating expenses of $300,000. Acct 201's Gross profit is:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Assume that the Acct 201 Co. has $1,000,000 in Sales ($600,000 on account; $400,000 for cash), Cost of merchandise sold of $100,000 and Operating expenses of $300,000. Acct 201's Gross profit is:
Expert Solution
Step 1
Formula:
Gross profit = Sales - cost of merchandise sold.
Deduction of cost of merchandise sold from sales value derives the Gross profit.
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