Question

For the answers to this question, round dollar figures to the nearest dollar and show all percents to two decimal points. Set up a skeletal statement using the following figures: Net sales $286,800 Gross margin $145,121 Profit 2.80%

Answer 1

Skeletal statement is as follows:

Net Sales	$      2,86,800	100.00%	Given
Cost of Goods Sold	$      1,41,679	49.40%	Working note 1
Gross Margin	$      1,45,121	50.60%	Working note 2
Operating Expenses	$      1,37,091	47.80%	Working note 4
Net Profit	$            8,030	2.80%	Working note 3

Working note:

1. Cost of Goods Sold:

Gross Margin = Net Sales - Cost of Goods Sold

Thus,

Cost of Goods Sold ($) = Net Sales - Gross Margin

= $ 286,800 - $ 145,121

= $ 141,679

Cost of Goods Sold (%) = ( Cost of Goods Sold / Net sales ) * 100

= ( $ 141,679 / $ 286,800 ) * 100

= 49.40%

2. Gross Margin

Gross Margin in dollar is given

Gross Margin (%) = ( Gross Margin / Net sales ) * 100

= ( $ 145,121 / $ 286,800 ) * 100

= 50.60%

3. Net Profit

As we know,

Net Profit (%) = ( Net Profit / Net sales ) * 100

Thus,

Net Profit = Net Sales * Net Profit (%)

= $ 286,800 * 2.80%

= $ 8,030

Net Profit in percentage is given

4. Operating Expenses:

Operating Expenses ($) = Gross Margin - Net Profit

= $ 145,121 - $ 8,030

=$ 137,091

Operating Expenses (%) = ( Operating Expenses / Net sales ) * 100

= ( $ 137,091 / $ 286,800 ) * 100

= 47.80%

Note:

Dollar figures are rounded to the nearest dollar and all percents are rounded to two decimal points as per requirement of question.