Question

STORE 5

NET SALES = ?

COST OF GOODS SOLD = $90.0

GROSS MARGIN-DOLLARS = ?

GROSS MARGIN-PERCENT = ?

EXPENSE-DOLLARS = $41.1

EXPENSE-PERCENT = ?

NET INCOME-DOLLARS = $0.5

NET INCOME-PERCENT = ?

Answer 1

Here, we will have to work back from net income (dollars) to arrive at the missing figures.

Net income (dollars)= $0.5

We arrive at the gross margin (dollars) when we add the expenses to net income.

Gross margin (dollars)= net income+ expenses= 0.5+41.1= $41.6

When we add the gross margin to the cost of goods sold, we get the net sales.

Net sales (dollars)= gross margin+ cost of goods sold= 41.6+90= $131.6

The following table has all required answers in one place for easy reference:

Particulars	Amount ($)	Percentage (%)
Net sales	131.6	100
(-) cost of goods sold	(90)	68.39 [(90*100)/131.6]
Gross margin	41.6	31.61 (100-68.39)
(-) expenses	(41.1)	31.23 [(41.1*100)/131.6]
Net income	0.5	0.38 (31.61-31.23)

Notes:

1. The percentages have been rounded off to the nearest two decimals for better accuracy. The student may round it off to the nearest whole if he chooses so. But be careful to apply the formula given in the table correctly.