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If a company has a trial balance showing $10,000 in Sales Revenue and $2,000 in

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Question: If a company has a trial balance showing $10,000 in Sales Revenue and $2,000 in Cost of Goods Sold, what is the gross profit?

Options:

  1. $8,000
  2. $10,000
  3. $2,000
  4. $12,000

Correct Answer: $8,000

Solution: 

Gross profit is calculated as Sales Revenue - Cost of Goods Sold, which is $10,000 - $2,000 = $8,000.

If a company has a trial balance showing $10,000 in Sales Revenue and $2,000 in

Practice Questions

Q1
If a company has a trial balance showing $10,000 in Sales Revenue and $2,000 in Cost of Goods Sold, what is the gross profit?
  1. $8,000
  2. $10,000
  3. $2,000
  4. $12,000

Questions & Step-by-Step Solutions

If a company has a trial balance showing $10,000 in Sales Revenue and $2,000 in Cost of Goods Sold, what is the gross profit?
  • Step 1: Identify the Sales Revenue amount, which is $10,000.
  • Step 2: Identify the Cost of Goods Sold amount, which is $2,000.
  • Step 3: Use the formula for gross profit: Gross Profit = Sales Revenue - Cost of Goods Sold.
  • Step 4: Substitute the values into the formula: Gross Profit = $10,000 - $2,000.
  • Step 5: Perform the subtraction: $10,000 - $2,000 = $8,000.
  • Step 6: Conclude that the gross profit is $8,000.
  • Gross Profit Calculation – Gross profit is determined by subtracting the Cost of Goods Sold (COGS) from Sales Revenue.
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