Calculate the gross profit for Jefferson Company based on the following: Sales Selling Expenses Cost of Merchandise Sold a. $183,500 b. $495,500 OC. $226,000 $764,000 42,500 538,000
Calculate the gross profit for Jefferson Company based on the following: Sales Selling Expenses Cost of Merchandise Sold a. $183,500 b. $495,500 OC. $226,000 $764,000 42,500 538,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![### Question 3
Calculate the gross profit for Jefferson Company based on the following information:
| Sales | $764,000 |
|----------------------------|----------|
| Selling Expenses | $42,500 |
| Cost of Merchandise Sold | $538,000 |
Options:
- a. $183,500
- b. $495,500
- c. $226,000
- d. $721,500
**Explanation:**
To calculate the gross profit, subtract the Cost of Merchandise Sold from Sales. Selling Expenses are not included in the calculation of gross profit:
\[ \text{Gross Profit} = \text{Sales} - \text{Cost of Merchandise Sold} \]
Substitute the values:
\[ \text{Gross Profit} = \$764,000 - \$538,000 = \$226,000 \]
Thus, the correct answer is **c. $226,000**.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F92b72ece-115d-42e0-89d8-9d9093976b00%2F6cf07eed-b1de-45f4-b34c-4460f2024d1f%2Ffq1qzvg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Question 3
Calculate the gross profit for Jefferson Company based on the following information:
| Sales | $764,000 |
|----------------------------|----------|
| Selling Expenses | $42,500 |
| Cost of Merchandise Sold | $538,000 |
Options:
- a. $183,500
- b. $495,500
- c. $226,000
- d. $721,500
**Explanation:**
To calculate the gross profit, subtract the Cost of Merchandise Sold from Sales. Selling Expenses are not included in the calculation of gross profit:
\[ \text{Gross Profit} = \text{Sales} - \text{Cost of Merchandise Sold} \]
Substitute the values:
\[ \text{Gross Profit} = \$764,000 - \$538,000 = \$226,000 \]
Thus, the correct answer is **c. $226,000**.
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