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In: Accounting

The adjusted trial balance of Sarasota Wholesale Inc. contained the following accounts at December 31, the...

The adjusted trial balance of Sarasota Wholesale Inc. contained the following accounts at December 31, the company’s year end:

Sarasota Wholesale INC.
Adjusted Trial Balance
December 31, 2021
Debit Credit
Cash $11,200
Accounts receivable 20,600
Prepaid insurance 2,600
Inventory 103,800
Supplies 6,700
Land 129,300
Buildings 217,000
Accumulated depreciation—buildings $92,900
Equipment 95,500
Accumulated depreciation—equipment 34,400
Accounts payable 60,600
Deferred revenue 10,400
Refund liability 5,200
Income tax payable 3,300
Bank loan payable 98,600
Common shares 55,000
Retained earnings 106,740
Sales 1,092,900
Cost of goods sold 813,400
Administrative expenses 89,300
Selling expenses 41,800
Interest expense 12,700
Interest income 2,200
Income tax expense 18,500
$1,562,400 $1,562,240

Calculate the profit margin and gross profit margin. (Round all amounts to 1 decimal place, e.g. 5.2%.)
Gross profit margin 25.6

profit margin 11%

I need /
$

The vice-president of marketing and director of human resources have proposed that the company change its compensation of the sales force to a commission basis rather than paying a fixed salary. Given the extra incentive, they expect sales to increase by 15%. They estimate that gross profit will increase by $27,000, operating expenses by $13,500, and income tax expense by $2,700. Non-operating expense is not expected to change. Calculate the expected new gross profit and net income amounts. (Hint: You do not need to prepare a formal statement of income.)

Find Expected new gross profit and Expected net income amount

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Expert Solution

ekkarill92 answered 2 years ago
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