A sole proprietor made sales worth Sh 12,000000.He incurred Sh 5,000000as cost of goods sold and sh2000000 as operating expenses.How much gross profit did he earn?

Gross profit is calculated by subtracting the cost of goods sold from the total sales.

Gross profit = Total sales - Cost of goods sold
Gross profit = Sh 12,000,000 - Sh 5,000,000
Gross profit = Sh 7,000,000

Therefore, the sole proprietor earned a gross profit of Sh 7,000,000.