Suppose Austin Sound had sales of $300,000 and sales returns of $45,000. Cost of goods sold was $152,000. How much gross profit did Austin Sound report?

Answer: $103,000

To calculate the gross profit, use the formula:

Gross Profit = Net Sales - Cost of Goods Sold

First, calculate net sales:

Net Sales = Sales - Sales Returns

Net Sales = $300,000 - $45,000 = $255,000

Then, calculate gross profit:

Gross Profit = Net Sales - Cost of Goods Sold

Gross Profit = $255,000 - $152,000 = $103,000

So, Austin Sound reported a gross profit of $103,000.

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