25 February, 13:20

# Consider the following information pertaining to Company C:Sales: \$48,000Sales returns and allowances: \$6,000Operating expenses: \$6,200Beginning inventory: \$900Net purchases: \$9,100Ending inventory: \$2,300The company's gross profit isA. \$34,003.B. \$43,000.C. \$34,300.D. \$34,000.

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Answers (1)
1. 25 February, 13:37
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C. \$34,300.

Explanation:

Gross profit = Net sales - cost of sales

1. calculating net sales

= sales - sales returns and allowances

=\$48,000-6000

=\$42,000

2. calculating cost of sales

=opening stock + purchases - closing stock

= (\$900+\$9100) - \$2300

=\$7,700

3. Gross profit

=\$42,000-\$7,700 = \$34,300

Gross profit = \$ 34,300
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