Understanding Gross Profit Rate and Profit Margin in Financial

School: Valparaiso University - Course: ACC 503 - Subject: Accounting

Dr.Cr. June 9Accounts Payable(1,760-60)1,700 Inventory (1,700 X 4%)68 Cash1,632 June 24Cash1,680 Sales Discount ($1,750 X 4%)70 Accounts Receivable1,750 June 26Accounts Payable900 Inventory ($900 X 3%)27 Cash873 Question 2: Gross Profit Rate:Profit Margin: Gross Profit$4,100Net Income$1,825 Net Sales$8,200Net Sales$8,600 Gross Profit Rate50.0%Profit Margin:21.2% Gross Profit Rate:Profit Margin: Gross Profit$5,125Net Income$2,148 Net Sales$10,250Net Sales$10,250 Gross Profit Rate50.0%Profit Margin:21.0%

Question 4 Cost of Goods Available for Sale$1,008 No of Units Available for Sale100 Weighted Average Unit Cost$10.080 12.6 FIFO:Question 5: Valuing Ending Inventory (Most Recent Purchase)Inventory Turnover: May 24:24 units X $ 11$264Cost of Goods Sold Average Inventory LIFO: (Opposite of FIFO-Start with Beginning Inventory) May 1:24 unitsX $ 9$216Average Inventory-20 ($530,000 + 562,000)/ Average-Cost: Units in Ending Inventory X Weighted-Average Unit CostInventory Turnover: 24 units X $10.080$242Cost of Goods Sold Average Inventory Average Inventory-20 ($562,000 + $330,000 Days in Inventory: 365 days/Inventory Tu Net Sales Cost of Goods Sold Gross Profit Gross Profit Rate: Gross Profit Net Sales Gross Profit Rate