6. A company\'s net sales were $676,600, its co income was $86,733. Its gross ma
ID: 2395062 • Letter: 6
Question
6. A company's net sales were $676,600, its co income was $86,733. Its gross margin as a % of sales equals. of goods sold was $236,810 and its net A. 5.0%. B. 16.2%. C. 9.29%. D, 285.7%. B. 65.0%. 7. Sherwin Williams Paint Co. terms are 3/20, n/60. What does this mean? 20% cash discount if the amount is paid within 60 days, or the balance due in 20 days. B. 20% cash discount if the amount is paid within 3 days, or the balance due in 60 days. C. 33% discount if paid within 60 days. D. 3% discount if paid within 20 days. days B. 3% cash discount if the amount is paid within 20 days, or the balance is due in 60 8. When is a debit memorandum used: A. The document a buyer issues to Inform the seller of a debit made to the seller's account payable in the buyer's records. B. The source documeat for the purchase of merchandise inventory. C. Required when a purchase discount is granted D. Required whenever a journal entry is recorded. E. Not necessary in a perpetual inventory system.Explanation / Answer
Answer to Question No. 6
Option E i.e. 65.0%
Gross Margin % = Gross Margin / Sales * 100
Gross Margin = Sales – Cost of Goods Sold
Gross Margin = $676,600 - $236,810
Gross Margin = $439,790
Gross Margin % = 439,790 / 676,600 * 100
Gross Margin % = 65.0%
Answer to Question No. 7
Option D
Term of 3/20, n/60 means the normal credit period is 60 days, but a discount of 3% will be allowed if payment is made within a period of 20 days.
Answer to Question No. 8
Option A
Debit memorandum is issued by buyer to seller which informs that a debit has been made in seller’s account in the Buyer’s book of accounts. Debit Memorandum is issued to inform debit such as discount or returns.
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