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The following is a listing of some of the balance sheet accounts and all of the income statement accounts for Northview Company as they appear on the company’s adjusted trial balance.
Accounts Payable $ 12,000
Accounts Receivable 22,000
Inventory 22,200
Advertising Expense 17,500
Cost of Goods Sold 133,000
Delivery Expense 7,100
Income Tax Expense 4,000
Insurance Expense 1,000
Rent Expense 16,400
Sales Revenue 270,000
Sales Discounts 9,900
Sales Returns & Allowances 35,500
Required:
A) The gross profit percentage would be closest to _______________.

Answer :

Answer:

40.78%

Explanation:

As we know that

The gross profit percentage is

= Gross profit ÷ Net sales × 100

where,

Net sales is

= Sales revenue - sales discounts - sales returns and allowances

= $270,000 - $9,900 - $35,500

= $224,600

And, the gross profit is

= Net Sales - cost of goods sold

= $224,600 - $133,000

= $91,600

So, the ratio is

= $91,600 ÷ $224,600 × 100

= 40.78%

Tundexi

The gross profit percentage is 33.93%.

Let understand that the gross profit percentage helps to know the margin earned on a product or service before the deduction of expenses.

  • The formulae for deriving Gross profit percentage is [tex]Gross profit/ Net Sales * 100[/tex]. So, we need to derive the amount of Gross profit and Net sales

[tex]Gross profit = Net Sales - Cost of goods sold\\\Gross profit = [Sales Revenue - Sales Discounts - Sales Returns & Allowances] - Cost of goods sold\\Gross profit = [270,000 - 9,900 - 35,500} - 133,000\\Gross profit = 224,600 - 133,000\\Gross profit = 91,600[/tex]

[tex]Gross profit percentage = [91,600 / 270,000] * 100\\Gross profit percentage = 33.92592593%\\Gross profit percentage = 33.93%[/tex]

In conclusion, the he gross profit percentage would be closest to 33.93%

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