Net sales Net sales is deducting Sales discount and sales returns and allowances from gross sales. It is calculated as showen below- Net sales=Sales-Sales dicount-Sales returns and allowances Gross profit Gross profit is calculated by deducting cost of goods sold from Net sales. Formula to calculate gross profit is as follows- Gross profit = Net sales – Cost of goods sold Gross profit ratio Gross profit ratio assesses the profitability of the company by stating gross profit as a percenatge of sales. It is calculated by usimg following formula- Gross profit ratio = Gross profit Net sales × 100 To Compute: To compute net sales, gross profit and gross profit ratio and to intrepret the gross profit ratio of Carrier.

Question

Want to see the full answer?

Answer 1

Question

Chapter 5, Problem 15QS

To determine

Concept Introduction:

Net sales

Net sales is deducting Sales discount and sales returns and allowances from gross sales. It is calculated as showen below-

Net sales=Sales-Sales dicount-Sales returns and allowances

Gross profit

Gross profit is calculated by deducting cost of goods sold from Net sales. Formula to calculate gross profit is as follows-

Gross profit = Net sales – Cost of goods sold

Gross profit ratio

Gross profit ratio assesses the profitability of the company by stating gross profit as a percenatge of sales. It is calculated by usimg following formula-

Gross profit ratio = Gross profitNet sales× 100

To Compute:

To compute net sales, gross profit and gross profit ratio and to intrepret the gross profit ratio of Carrier.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Write down as many descriptions describing rock and roll that you can. From these descriptions can you come up with s denition of rock and roll? What performers do you recognize? What performers don’t you recognize? What can you say about musical inuence on these current rock musicians? Try to break these inuences into genres and relate them to the rock musicians. What does Mick Jagger say about country artists? What does pioneering mean? What kind of ensembles w

Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's expenses, Gross margin, and Net income?

Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's assets, Liabilities, and Equity?