Question

21. Financial information is presented below:

Operating expenses	$ 55000
Sales returns and allowances	3000
Sales discounts	9000
Sales revenue	200000
Cost of goods sold	87000

The profit margin would be

0.54.

0.24.

0.48.

23.Assume Pina Colada Corp. uses the periodic inventory system and has a beginning inventory balance of $5800, purchases of $65000, and sales of $112000. Pina closes its records once a year on December 31. In the accounting records, the inventory account would be expected to have a balance on December 31 prior to adjusting and closing entries that was

equal to $5800.

more than $5800.

less than $5800.

Answer 1

21) The profit margin would be is calculated as follows:

Profit margin = Net Profit / Net Sales *100

	$
Sales revenue (Gross)	200,000
Less:
Sales returns and allowances	3,000
Sales discounts	9,000
Net Sales Revenue	$188,000
Cost of goods sold	87000
Gross Margin	$101,000
Less: Operating Expenses	$55,000
Net Income	$46,000

Profit margin =  $46,000 / $188,000

= 0.24

So correct answer is an option(2) or 0.24

23) The inventory account would be expected to have a balance on December 31 prior to adjusting and closing entries that was $ equal to $5800.

Because if there is a no adjustment made with respect to sales and purchases, then the amount of the begining inventory account will be same as amount of the ending inventory that will be to $5,800.

So correct answer is an option (1) or equal to $5800