Question
Asked Nov 17, 2019
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I see that the answer is 61.5%. But I want to know is how do I solve for the answer, what is it that I need to do.

Compute the Company's gross profit percentage using the following accounts
-Inventory, December 31, 2013
Sales -Gross
$195,000
550,000
200,000
15,000
10,000
5,000
Cost of sales
Sales returns
Sales allowances
Sales discounts estimated
58%
А.
60.9%
В.
61.5%
C.
39.4%
D.
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Compute the Company's gross profit percentage using the following accounts -Inventory, December 31, 2013 Sales -Gross $195,000 550,000 200,000 15,000 10,000 5,000 Cost of sales Sales returns Sales allowances Sales discounts estimated 58% А. 60.9% В. 61.5% C. 39.4% D.

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Expert Answer

Step 1

The formula to calculate net sales is given below:

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Gross sales-Sales return Net sales -Sales allowances - Sales discount

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Step 2

Substitute $550,000 for gross sales, $15,000 for sales return, $10,000 for sales allowances and $5,000 for sales discount,

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Net sales ($550,000 - $15, 000-$10,000-$5,000) = $520, 000

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Step 3

The formula to calculate gross profi...

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Net sales Cost of goods sold Gross profit percentage= Net sales

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