Stanley's Bicycles Store Buys Bicycles on Average for $600 and Sells

question 165

Multiple Choice

Stanley's Bicycles store buys bicycles on average for $600 and sells them on average for $750.He pays a sales commission of 15% of sales revenue to his sales staff.Stanley pays $1,400 a month rent for his store,and also pays $3,000 a month to his staff in addition to the commissions.Stanley sold 120 bicycles in June.If Stanley prepares a traditional income statement for the month of June,what would be his gross profit?

• A)$162,000
• B)$18,000
• C)$72,000
• D)$90,000

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Definitions:

Penalty

refers to a punishment imposed for breaking a law, rule, or contract.

Breach

An act of breaking or failing to observe a law, agreement, or code of conduct.

Wallace and Bruce

Refers to William Wallace and Robert the Bruce, key figures in the Scottish struggle for independence from England in the late 13th and early 14th centuries.

Restatement of Torts

A legal treatise produced by the American Law Institute that summarizes the general principles of tort law in the United States, including liability, negligence, and damages.