Question

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%.)
  

Answer 1

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%