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Ch(6): Income Statement for Merchandise Business138Exercise (6-1): Choose the correct answer.1-A company had sales of BD695,000 and cost of goods sold of BD278,000. Its gross profitequals:A.BD (417,000).B.BD 695,000.C.BD 278,000.D.BD 417,000.E.BD 973,000.2-A company had sales of BD375,000 and its gross profit was BD157,500. Its cost of goods sold equals:A.BD (217,000).B.BD 375,000.C. BD 157,500.D.BD 217,500.E.BD 532,500.3-Beginning inventory plus net purchases is:A.Cost of goods sold.B.Merchandise available for sale.C.Ending inventory.D.Sales.E.Shown on the balance sheet.4-Sales less sales discounts less sales returns and allowances equals:A.Net purchases.B.Cost of goods sold.C.Net sales.D.Gross profit.E.Net income.Exercises