Question

Suppose Juniper Natural Dyes​, ​Inc., had sales of $ 220 comma 000 and estimated refund liability of $ 16 comma 000. Cost of goods sold was $ 110 comma 000. How much gross profit did Juniper Natural Dyes​, ​Inc., report?

Answer 1

Answer:

$94,000

Explanation:

Given:

Sales = $220,000

Sales return (refund liability) = $16,000

Cost of goods sold = $110,000

Now,

Net sales = Sales - Sales return

Net sales = $220,000 - $16,000

Net sales = $204,000

Gross profit can be calculated as:

Gross profit = Net sales - Cost of goods sold

Gross profit = $204,000 - $110,000

Gross profit = $94,000