The Following Are the Revenue and Expense Accounts of the Current

question 41

Essay

The following are the revenue and expense accounts of the current year for ABCO Corporation:
$\begin{array}{lr}\text { Sales revenue } & \$ 200,000 \\\text { Interest revenue } & 3,000 \\\text { Interest expense } & 6,000 \\\text { Gain from sale of land } & 2,700 \\\text { Cost of goods sold } & 120,000 \\\text { Administrative expense } & 39,000 \\\text { Loss on disposal of segment } & 45,000\end{array}$

All items are before income taxes. The income tax rate is 20%. Calculate the gross profit that should be disclosed on the income statement.

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Definitions:

Liability for Negligence

Legal responsibility for harm caused by failing to act as a reasonable person would, resulting in damage or injury to another.

Third-Party Users

Individuals or entities that are not directly involved in a contract or transaction but who may be affected by it or have rights or obligations arising from it.

Accountant-Client Privilege

The right of an accountant to not reveal any information given in confidence by a client. The privilege is not granted by every state or by the federal government.

Demanding Payment

The act of formally or informally requesting the settlement of a sum of money owed from a debtor.