| D ezto.mheducation.com/hm.tpx The following Information applles to the questio
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| D ezto.mheducation.com/hm.tpx The following Information applles to the questions displayed below] Big Tommy Corporation is a local grocery store organized seven years ago as a corporation. The book keeper prepared the following statement (assume that all amounts are correct, but note the incorrect terminology and format) BIG TOMMY CORPORATION Profit and Loss December 31 Credit $390,000 Debit Cost of Goods Sold Sales Returns and Allowances Sales Discounts Salaries and Wages Expense Office Expense Travel Expenses Income Tax Expense Net Profit $ 263,000 8,600 5,600 54.000 13,000 1,000 13.440 31,360 Totals $ 390.000 $390,000Explanation / Answer
Gross Profit (%) : (Net sales - COGS / Net Sales) *100
where , Net sales = sales - sales returns and allowances - sales discounts
= $390,000 - $8,600 - $5,600 = $375,800 ; COGS (given) = $263,000
Gross Profit (%) = ($375,800 - $263,000 / $375,800 ) *100 = 30.0 %
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