The fellewing infomation ia taken from the financial statemena of a company for

Question

The fellewing infomation ia taken from the financial statemena of a company for the cument year 5395,000 2. Requred infermation Use the information above to snower the following question On common size income statement for the year, whet is the pencentege that woul be shown next to the doiler amount of sales revenue O Cannot be determined 3. Requred infermation Use the informotion above to enower the following question The gross proflit percentage for the current yeer rounded to the nearest whole percent is cloe to 76 O 60% 024%

Explanation / Answer

Question 2

In the question, we have been asked to find out the % that needs to be mentioned next to the dollar amount of sales revenue. To find out that %, we need to find out the sales revenue.

With the given information, we know that

Gross profit= Sales- Cost of Goods Sold

$ 200,000 = Sales- $ 650,000

Therefore, Sales = $ 200,00 + $ 650,000 = $ 850,000

And always to find out the gross profit ratio or net profit ratio, the sales is always taken as base. Therefore, it is 100% that needs to be mentioned as sales revenue.

Question 3

To find out the Gross profit Ratio:

GP Ratio = (Gross profit/ Sales)*100

= ( $ 200,00/ $ 850,000)* 100

= 24 %

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