Assignment Gradebook ORION Downloadable eTextbook ce ent Exercise 6-13 Financial
ID: 2539713 • Letter: A
Question
Assignment Gradebook ORION Downloadable eTextbook ce ent Exercise 6-13 Financial information for two companies are presented below. Fill in the missing amounts Sheridan Company Crane Company Sales revenue Sales returns and allowances Net sales Cost of goods sold Gross profit Operating expenses $90,000 3,000 128,000 84,000 52,920 60,160 20,580 Net income 17,920 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Calculate the profit margin and the gross profit rate for each company. (Round answers to 1 Sheridan Company Crane Company Profit marnin asvpolise l 2000-201aJohnwilevasons-ins. All Rights Reserved. A Division of 20hnwilevasonuln"Explanation / Answer
Solution
Step 1 : Find out the missing figures as given below
Sheridan company
Crane Company
Sales Revenue
90,000
131,000
Less: Sales Returns
6,000
3,000
Net Sales
84,000
128,000
Less: Cost of Goods Sold
52,920
67,840
Gross Profit
31,080
60,160
Less: Operating Expenses
20,580
42,240
Net Income
10,500
17,920
Step 2 : Calculate Gross Profit Rate
Gross Profit Rate = Gross Profit / Net Sales x 100
Sheridan company
Crane Company
Gross Profit
31,080
60,160
Net Sales
84,000
128,000
Gross Profit Rate
=31080/84000 x 100
=60160/128000 x 100
37%
47%
Step 3 : Calculate Profit Margin (Rate of Net Profit)
Profit Margin = Net Income / Net Sales x 100
Sheridan company
Crane Company
Net Income
10,500
17,920
Net Sales
84,000
128,000
Profit Margin
=10500 / 84000 x 100
=17920 / 128000 x 100
12.5%
14%
Sheridan company
Crane Company
Sales Revenue
90,000
131,000
Less: Sales Returns
6,000
3,000
Net Sales
84,000
128,000
Less: Cost of Goods Sold
52,920
67,840
Gross Profit
31,080
60,160
Less: Operating Expenses
20,580
42,240
Net Income
10,500
17,920
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