Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. Gross profit equals?

Gross profit equals $420,000

Explanation:

To get gross profit, we only discount the cost of goods sold from the Total sales

Gross profit Formula = net sales - cost of goods sold

Gross profit = $800,000 - $380,000

Gross profit = $420,000

We use sales returns and allowances, sales discounts and operating expenses to get net income.