Can you calculate the missing sales revenue

Question

calculate sales revenue on an income statement given a cost of goods sold of 56,000, gross profit of 59,000 and operating expenses of 48,000

Answer 1

Hello,

Operating Expenses are not considered while computing the Sales Revenue or Gross Profit or Gross Margin.

Generally the Sales Revenue is known, and we compute the Gross Margin by subtracting COGS from the Sales Revenue by this formula:

Gross Profit = Sales Revenue - COGS

In order to get to the Sales revenue number, we only need the Gross Profit and the COGS.

The formula to arrive at this, would be simply moving the negative COGS to the other side of the equation and changing the sign to positive. So the formula for the Sales Revenue becomes:

Gross Profit + COGS = Sales Revenue

This means we add $56,000 to $59,000 and arrive at the answer of $115,000.

If this is helpful, feel free to write a review, as I'm new to Wyzant.

Answer 2

Hello Grace, 

It might be helpful to remember the format of a Multiple-step Income Statement. The goal of the statement is to produce multiple sub-totals showing various levels of earnings in the firm, such as how much we made on the sale of the product, as opposed to how much we made in our firm.

  

Once memorized, computing Sales Revenue would be straight-forward, as you need to find what number minus $56,000 equals $59,000

Good luck, and post if you need further clarification. 

Sincerest Regards, 

Joe D.

   Partial Income Statement

Sales Revenue 115,000       

Less: Cost of Good Sold                56,000

       Gross Profit 59,000

Less: Operating Expenses             48,000

       Net Income $   11,000

Answer 3

Hi Grace,

Given Data:

1. Cost of Goods Sold (COGS): $56,000
2. Gross Profit: $59,000
3. Operating Expenses: $48,000

Objective: Calculate Sales Revenue on the income statement.

Formula: Sales Revenue = Gross Profit + COGS

Calculation: Sales Revenue = $59,000 + $56,000 Sales Revenue = $115,000

If this was helpful, please consider leaving me a review -- it is very helpful for me especially since I am new to this platform. Thank you!