Consider the following information pertaining to Company C:

Sales: $48,000

Sales returns and allowances: $6,000

Operating expenses: $6,200

Beginning inventory: $900

Net purchases: $9,100

Ending inventory: $2,300

The company's gross profit is

A. $34,003.

B. $43,000.

C. $34,300.

D. $34,000.

C. $34,300.

Explanation:

Gross profit = Net sales - cost of sales

1. calculating net sales

= sales - sales returns and allowances

=$48,000-6000

=$42,000

2. calculating cost of sales

=opening stock + purchases - closing stock

= ($900+$9100) - $2300

=$7,700

3. Gross profit

=$42,000-$7,700 = $34,300

Gross profit = $ 34,300