# The Gross Profit

One answer is correct for each problem.

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1. In the month of January a car dealership bought its vehicles for \$100,000 and sold them for \$145,000. It pays its employees \$20,000 for the month.  What is the gross profit for January?
2. \$45,000
3. \$25,000
4. \$100,000
5. \$145,000

1. An investment company purchased land June 1, 2019 for \$100,000. At the end

2020, the land is sold for \$220,000. It incurred operating expenses of \$80,000. What is the net income recorded for the year ended December 31, 2020?

1. \$220,000
2. \$100,000
3. \$120,000
4. \$40,000

1. Bella Inc. purchased \$12,500 worth of merchandise on June 1, 2019 on credit. After inspecting the inventory it determined that 20% of the items were defective. It returned these goods to the supplier. Assume a perpetual inventory system is used, a physical count verifies the amount of goods, and no other transactions take place, what is balance reported as inventory on the balance sheet?
2. \$12,500
3. \$10,000
4. \$2,500
5. \$15,000

1. Beanie Inc. purchases on credit and receives \$8,500 worth of merchandise on June 1, 2019. After inspecting the inventory, management determines that 10% of the items are defective. These are returned to the supplier. The terms with the supplier are 2/10, n30.  If Beanie pays the invoice on June 15, what is the amount paid?
1. \$7,497
2. \$7,650
3. \$8,330
4. \$6,885

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