Net Sales of Clean Spectacles Is $90,000, Cost of Goods

question 42

Multiple Choice

Net sales of Clean Spectacles is $90,000, cost of goods sold is $54,000, selling expenses are $17,000, and general expenses are $12,500. Which of the following is its gross profit?

• A) $19,000
• B) $173,500
• C) $36,000
• D) $83,500
• E) $6,500

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Definitions:

Past Consideration

In contract law, the concept that an act or benefit provided before and independently of a promise does not constitute valid consideration for the promise.

Accord and Satisfaction

A legal contract wherein a dispute is settled by the parties involved agreeing to provide and accept something different than originally owed.

Doctrine of Promissory Estoppel

A legal principle preventing a party from withdrawing a promise made when the other party has reasonably relied on that promise to their detriment.

Preexisting Duty Rule

A legal principle stating that an existing obligation in a contract cannot serve as consideration for a new contract or for modifying the existing contract.