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One stores information is listed in the table below. Sales return $700 rent expenses $1,288 sales discount $950 depreciation expense $600 cost of merchandise sold $7,600 gross sales $20,900 advertising expense $1,650 salary expense $2,900 heat expense $900 Using this information calculate the stores net sale gross profit total operating expenses and net income

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bharathparasad577

Sales Return -$700                                Cost of merchandise sold- $7600

Rent Expenses- $1288                           Gross sales- $20900

Sales Discount- $950                             Advertising Expense- $1650

Depreciation Expense- $600                 Salary expense- $2900

Heat expense- $900

  • Net sales occurs only when sales returns, allowances or any discounts is subtracted from company's gross sales.

   A) Net sales = Gross sales- return- sales discount

       Net Sales= $20900- $700- $950 = $19,250

  • Company's revenue or sales subtract cost of goods sold or direct expenses.

   B) Gross profit=  Net Sales- Cost of merchandise sold

        Gross profit= $19,250- $7600 =$11,650

  • Expenses incure during normal business operations like rent, insurance etc.

    C) Total operating expenses= Rent+ Depreciation+ Heat+ Advertising+    Salary expense

Total operating expenses= $1288+ $600+ $1650+ $2900+ $900= $7,338

  • The amount which comes after deducting cost, allowances & taxes.

    D) Net income= Gross profit- total operating expenses

         Net income= $11,650- $7338= $4,312

Hence, net sales is $19250, gross profit is $11650, total operating expenses is $7338, net income is $4312

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