Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 6

Determining gross profit
During the current year, merchandise is sold for $4,885,000. The cost of the merchandise sold is $3,028,700.
a. What is the amount of the gross profit
b. Compute the gross profit percentage (gross profit divided by sales).
c. Will the income statement necessarily report a net income Explain.