Homework Answers
Option A is correct i.e subtract any depreciation and/or amortization included in cost of goods sold.
Reason :-
To arrive at the adjusted gross profit, cost of goods sold to be adjusted with the carrying cost of inventory incurred to store and safeguard inventory.
Adjusted gross profit = Revenue - cost of goods sold - carrying cost
Depreciation or amortization would not be included in carrying cost, therefore, eliminated from cost of goods sold.
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