Question

# Sales \$ 158,000 \$ 710,000 \$ 46,000 \$ 265,000 Sales discounts 5,000 16,000 600 4,200 Sales...

 Sales \$ 158,000 \$ 710,000 \$ 46,000 \$ 265,000 Sales discounts 5,000 16,000 600 4,200 Sales returns and allowances 16,000 6,000 4,700 800 Cost of goods sold 92,064 442,384 31,339 131,040

Compute net sales, gross profit, and the gross margin ratio for each of the four separate companies. (Round your gross margin ratio to 1 decimal place; i.e.; 0.2367 should be entered as 23.7%.)

Required:

Computation of net sales:

 1 2 3 4 Sales \$158,000 \$710,000 \$46,000 \$265,000 (-) Sales discount (\$5,000) (\$16,000) (\$600) (\$4,200) (-) Sales return and allowance (\$16,000) (\$6,000) (\$4,700) (\$800) Net sales \$137,000 \$688,000 \$40,700 \$260,000

Computation of gross profit:

 1 2 3 4 Net sales \$137,000 \$688,000 \$40,700 \$260,000 (-) Cost of goods sold (\$92,064) (\$442,384) (\$31,339) (\$131,040) Gross profit \$44,936 \$245,616 \$9,361 \$128,960

Computation of gross margin ratio:

 1 2 3 4 Gross profit \$44,936 \$245,616 \$9,361 \$128,960 (/) Net sales \$137,000 \$688,000 \$40,700 \$260,000 Gross margin ratio 32.8% 35.7% 23% 49.6%

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