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A firm's year-end retained earnings balances are $670,000 and $560,000, for 2014 and 2015 respectively
A firm's year-end retained earnings balances are $670,000 and $560,000, for 2014 and 2015 respectively. The firm paid $10,000 in dividends in 2015. The firm's net profit after taxes in 2015 was ______.
Select one:
a. $110,000
b. $100,000
c. -$110,000
d. -$100,000
======================
Gross profit is ______.
Select one:
a. sales revenue minus operating expenses
b. sales revenue minus cost of goods sold
c. operating profits minus cost of goods sold
d. operating profits minus depreciation
Expert Solution
A firm's year-end retained earnings balances are $670,000 and $560,000, for 2014 and 2015 respectively. The firm paid $10,000 in dividends in 2015.
The firm's net profit after taxes in 2015 = (Firm's year-end retained earnings balance in 2015 - firm's year-end retained earnings balance 2014 + dividend payment)
= ($560,000 -$670,000 + $10,000)
= - $100,000
Therefore correct answer is option d. - $100,000
Gross profit is of the company = sales revenue - cost of goods sold
The gross profit of the company equals Sales or revenue minus cost of goods sold (COGS) which is direct cost associated with producing goods or services of the company.
Therefore correct answer is option b. sales revenue minus cost of goods sold
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