Question

Assume Blue Spruce Corp. has the following reported amounts: Sales revenue $724,200, Sales returns and allowances $21,300, Cost of goods sold $468,600, and Operating expenses $156,200. (a) Compute net sales. Net sales $enter Net sales in dollars (b) Compute gross profit. Gross profit $enter Gross profit in dollars (c) Compute income from operations. Income from operations $enter Income from operations in dollars

Answer 1

Answer:

(a) Net sales is $702,900

(b) Gross profit is $234,300

(c) Income from operations is $78,100

Explanation:

Net sales is the result of the total sales less discounts, allowances and sales return.

The gross profit is the net sales less the cost of goods sold while the income from operations is the gross profit less the operating expenses.

Net sales

= $724,200 - $21,300

= $702,900

Gross profit

= $702,900 - $468,600

= $234,300

Income from operations

= $234,300 - $156,200

= $78,100