@Cking13I think you are reading the report incorrectly.

Per your screenshot, your total income is $130,752.07.

Your COGS are $47,248.77.

$130,752.07 (Income) less $47,248.77 (COGS) equals $83,503.30 (Gross Profit).

After that, your advertising and other expenses get subtracted from your Gross Profit to arrive at Net Profit.

That may still screw you on the revenue limit; I'm not familiar with the bylaws for contractor licenses. The bookkeeping is correct, though. If you sell goods, that's sales. You just get to write off your cost in the goods sold (COGS) so that you don't pay income taxes on that amount later.