Account balances for the fiscal year ending in December 31, 2012: Sales: $700,000 Merchandise Inventory: $200,000 Sales Discounts: $10,000 Sales Returns & Allowances: $15,000 Cost of Goods Sold: $400,000 Operating Expenses: $120,000 Interest Revenue: $25,000 1. Find the reported gross profit for 2012 2. Find gross profit percentage for 2012 Solution Calculatiom of reported gross profit for 2012 Gross profit is the difference between the net sale and cost of goods sold Net Sales=700000-10000-15000= 675000 Gross Profit= 675000-400000=275000 Percentage=275000/675000*100= 40.74% .

1. Account balances for the fiscal year ending in December 31, 2012:
Sales: $700,000
Merchandise Inventory: $200,000
Sales Discounts: $10,000
Sales Returns & Allowances: $15,000
Cost of Goods Sold: $400,000
Operating Expenses: $120,000
Interest Revenue: $25,000
1. Find the reported gross profit for 2012
2. Find gross profit percentage for 2012
Solution
Calculatiom of reported gross profit for 2012
Gross profit is the difference between the net sale and cost of goods sold
Net Sales=700000-10000-15000= 675000
Gross Profit= 675000-400000=275000
Percentage=275000/675000*100= 40.74%