Question

In: Accounting

Given the following accounts: Wages Expenses 4,000 Receivables 2,662 Land 17,684 Automobiles 56,163 Rent 700 Commercial...

Given the following accounts:

Wages Expenses 4,000
Receivables 2,662
Land 17,684
Automobiles 56,163
Rent 700
Commercial Paper Payable (3 months) 3,754
Long Term Debt 24,754
Long Term Interest Payable 1,467
Capital 3,350
Accounts Payable (11 months) 23,698
Retained Earnings 46,381
Cash and Cash Equivalents 6,414
Sales 51,496
Other Income 250
Inventories 25,076
Other Expenses 500
Transportation Expense 165
Debts due within one year 4,595

Build the balance sheet and the income statement

What is the gross profit margin? (enter your answer rounded to two decimals)

Gross profit margin = net income / sales

Solutions

Expert Solution

Income Statement Amt
Sales $               51,496
Wages $                 4,000
Gross Magin $               47,496
Rent $                     700
transportation Expnses $                     165
Operating Income $               46,631
Other Income $                     250
Other Expenses $                     500
Net Profit $               46,381
Balance sheet Amt
Assets
Current Assets
Receivables $                 2,662
Cash and Cash Eq $                 6,414
Inventory $               25,076
Total Current Assets $               34,152
Non-current Assets
Land $               17,684
Automobiles $               56,163
Total Non-current assets $               73,847
Total Assets $             107,999
Liabilities
Current Liabilities
Commercial Paper(payable 3 months) $                 3,754
Debts due within 1 year $                 4,595
Account Payable $               23,698
Total Current Liabilites $               32,047
Long Term Liabilites
Long term debt $               24,754
Long Term Interest payable $                 1,467
Total Long term liabilities $               26,221
Capital & Retained earnings
Capital $                 3,350
Retained Earnings $               46,381
Total Capital and retained earnings $               49,731
Total Liabilities $             107,999

Gross profit margin=Gross profit/Net Sales * 100 = 47497/51496*100=92.23%

Assuming that rent and transportation charges are indirect expenses since nothing is mentioned in the question.

Futher, As stated in the question "Gross profit margin = net income / sales"

Answer will be =46381/51496*100=90.07%

(All calculations given in income statement as above)

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ekkarill92 answered 3 years ago
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