Question

Cushman Company had $818,000 in sales, sales discounts of $12,270, sales returns and allowances of $18,405, cost of goods sold of $388,550, and $281,395 in operating expenses. Net income equals:

(a) $7,87,325

(b) $1,17,380

(c) $3,98,775

(d) $1,78,730

(e) $1,48,055

 

Answer 1

Calculation of Net income

Particulars	Amount $	Amount $
Sales	8,18,000
Less : Sales Discounts	12,270
Less : Sales Returns & Allowance	18,405
Net Sales		7,87,325
Less : Cost of Goods Sold		3,88,550
Gross Margin		3,98,775
Less : Operating Expenses		2,81,395
Net Income		1,17,380

Option (b) $1,17,380 is the correct choice