Crazy Cookies earned net sales revenue of $66,000,000 in 2018. The cost of goods sold was $39,600,000, and net income reached $7,000,000, the company’s highest ever. Compute the company’s gross profit percentage for 2018.
The gross profit percentage of the company is 40%
Gross profit denotes the amount of profit left with the company after making the payments of all the costs associated with the business's sales process. It is computed after deducting the cost of goods sold from the net sales revenues.
Camilia Communications reported the following figures from its adjusted trial balance for its first year of business, which ended on July 31, 2018:
Cash $ 2,900 Cost of Goods Sold $ 18,700
Selling Expenses 1,400 Equipment, net 9,500
Accounts Payable 4,300 Accrued Liabilities 1,800
Common Stock 4,365 Net Sales Revenue 29,200
Notes Payable, long-term 500 Accounts Receivable 3,200
Merchandise Inventory 1,100 Interest Expense 65
Administrative Expenses 3,300
Prepare Camilia Communication’s multi-step income statement for the year ended July 31, 2018.
Journalize the following sales transactions for Austin Mall. Assume Austin Mall uses the gross method to record sales revenue. Explanations are not required.
Jan. 4 Sold $10,000 of antiques on account, credit terms are 1/15, n/30. Cost of goods is $5,000.
20 Austin Mall received payment from the customer on the amount due from Jan. 4.
20 Sold $5,200 of antiques on account, credit terms are 1/10, n/45, FOB destination. Cost of goods is $2,600.
20 Austin Mall paid $120 on freight out.
29 Received payment from the customer on the amount due from Jan. 20, less the discount.
Question: Journalize the following transactions that occurred in January 2018 for Mike’s Amusements. Assume Mike’s uses the gross method to record sales revenue. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name.
Jan. 4 Purchased merchandise inventory on account from Vanderbilt Company, $5,000. Terms 1/10, n/EOM, FOB shipping point.
6 Paid freight bill of $150 on January 4 purchase.
8 Returned half the inventory purchased on January 4 from Vanderbilt Company.
10 Sold merchandise inventory for cash, $1,100. Cost of goods, $440. FOB destination.
11 Sold merchandise inventory to Gilmore Corporation, $10,100, on account, terms of 3/10, n/EOM. Cost of goods, $5,555. FOB shipping point.
12 Paid freight bill of $30 on January 10 sale.
13 Sold merchandise inventory to Cadet Company, $8,800, on account, terms of 3/10, n/45. Cost of goods, $4,400. FOB shipping point.
14 Paid the amount owed on account from January 4, less return and discount.
18 Purchased inventory of $4,600 on account from Roberts Corporation. Payment terms were 1/10, n/30, FOB destination.
20 Received cash from Gilmore Corporation, less discount.
26 Paid amount owed on account from January 18, less discount.
28 Received cash from Cadet Company.
29 Purchased inventory from Silk Corporation for cash, $12,000, FOB shipping point. Freight in paid to shipping company, $240.
Match the accounting terms with the corresponding definitions.
1. Credit Terms a. The cost of the merchandise inventory that the business has sold to customers.
2. FOB Destination b. An amount granted to the purchaser as an incentive to keep goods that are not “as ordered.”
3. Invoice c. A type of merchandiser that buys merchandise either from a manufacturer or a wholesaler and then sells those goods to consumers.
4. Cost of Goods Sold d. A situation in which the buyer takes ownership (title) at the delivery destination point.
5. Purchase Allowance e. A type of merchandiser that buys goods from manufacturers and then sells them to retailers.
6. FOB Shipping Point f. A discount that businesses offer to purchasers as an incentive for early payment.
7. Wholesaler g. A situation in which the buyer takes title to the goods after the goods leave the seller’s place of business.
8. Purchase Discount h. The terms of purchase or sale as stated on the invoice.
9. Retailer i. A seller’s request for cash from the purchaser.
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