Use the following financial information from Akerley Cafe to calculate its gross profitand gross profit margin for 2015 and 2016. Round to two decimal places.20162015Cost of Sales$133,000$140,000Cash$20,000$21,000Accounts Receivable$35,000$45,000Revenue$200,000$235,000Operating Expenses$40,000$29,000Net Profit$27,000$91,000

Answered: Use the following financial information…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...

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Question

Use the following financial information from Akerley Cafe to calculate its gross profit
and gross profit margin for 2015 and 2016. Round to two decimal places.
2016
2015
Cost of Sales
$133,000
$140,000
Cash
$20,000
$21,000
Accounts Receivable
$35,000
$45,000
Revenue
$200,000
$235,000
Operating Expenses
$40,000
$29,000
Net Profit
$27,000
$91,000

Expert Solution

Step 1

Ratio analysis is a method of measuring the financial position of the organization with different kinds of ratios such as liquidity ratio, profitability ratio, solvency ratio. These ratios help to compare two or more financial statements.

Step 2

Gross profit = Revenue - Cost of sales

For 2015

Gross profit = 235,000 - 140,000

= $ 95,000

For 2016

Gross profit = 200,000 - 133,000

= $ 67,000

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