Practice
Check your answer
Choose a response, then check the answer and explanation.
Net sales are 900,000, and cost of goods sold is 585,000. The cost figure already includes 12,000 of freight paid to bring purchased inventory in. Delivery freight is 18,000. Sales salaries are 96,000, administrative salaries are 74,000, and interest expense is 21,000.
Freight is the item that separates the two subtotals most often. Freight in is a cost of the goods and sits above gross profit; freight out is a cost of selling them and sits below it.