QUESTION 5 Financial information is presented bellow: Operating expense Sales re

Question

QUESTION 5 Financial information is presented bellow: Operating expense Sales returns and allowances..13,000 Sales discounts.6 $45,000 Sales revenue.1 6,000 160,000 GROSS PROFIT IS? O $77,000 o $70,000 $64,000 O$83,000 QUESTION 6 Financial information is presented bellow Operating expenses.. Sales returns and allowances..3000 $45,000 13,000 Sales discounts. 6,000 Cost of goods sold... 160,000 GROSS PROFIT RATE IS s revenue 7.000 O.45. .50. .54. QUESTION 7 Financial information is presented bellow Operating expenses...$4.000 Sales returns and allowances 13,000 Sales discounts.snsaens6,000 Sales revenuee160 160,000 77,000 Cost of goods sold.... THE PROFIT MARCIN RATIO 1S77.000 0-454. .238. O 135.

Explanation / Answer

Q5) Gross profit = Net sales - cost of goods sold

Net sales               = 160,000 - (13,000 +6000)    = $141,000

Gross profit          = $141,000 - $77,000           = $64,000

q6) Gross profit rate = gross profit / net sales

                                    = 64,000/ 141,000   = .45

Q7) Profit marign= net income / net sales

                            = ($64,000 - $45,000)/ $141,000   = .135

Q8) Gross profit = Net sales - cost of goods sold

                             = 125,000 - $80,000 = $45,000

Q9) Gross profit = 700,000/ 2,000,000 = 35%

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