Financial information is presented below: Operating expenses 28,000 Sales return

Question

Financial information is presented below: Operating expenses 28,000 Sales returns and allowances 7,000 Sales discounts 3,000 Sales revenue 150,000 Cost of goods sold 91,000

What is the net income?
What is the net sales?
What is the profit margin ratio?
Please explain how to find each. Thank you Financial information is presented below: Operating expenses 28,000 Sales returns and allowances 7,000 Sales discounts 3,000 Sales revenue 150,000 Cost of goods sold 91,000

What is the net income?
What is the net sales?
What is the profit margin ratio?
Please explain how to find each. Thank you

Explanation / Answer

Hi,

Please find the answer as follows:

Net Sales = 150000 (Sales) - 7000 (Sales Returns and Allowances) = 143000

Net Income = Net Sales - Cost of Goods Sold - Sales Discounts - Operating Expenses = 143000 - 91000 - 3000 - 28000 = 21000

Profit Margin Ratio = Net Income/Net Sales*100 = 21000/143000*100 = 14.69%

Thanks.

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